10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2021

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File No. 000-16929

SOLIGENIX, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	41-1505029
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

29 EMMONS DRIVE, SUITE B-10 PRINCETON, NJ	08540
(Address of principal executive offices)	(Zip Code)

(609) 538-8200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	SNGX	The Nasdaq Capital Market
Common Stock Purchase Warrants	SNGXW	The Nasdaq Capital Market

Indicate by check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 11, 2021, 40,103,760 shares of the registrant’s common stock (par value, $.001 per share) were outstanding.

SOLIGENIX, INC.

Index

	Description	Page
Part I	FINANCIAL INFORMATION
Item 1	Consolidated Financial Statements
	Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020	1
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)	2
	Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)	3
	Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2021 and 2020 (unaudited)	4
	Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended June 30, 2021 and 2020 (unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4	Controls and Procedures	49
Part II	OTHER INFORMATION
Item 1	Legal Proceedings	50
Item 1A	Risk Factors	51
Item 6	Exhibits	52
SIGNATURES		53

i

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

Soligenix, Inc. and Subsidiaries

Consolidated Balance Sheets

	June 30,		December 31,
	2021		2020
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	28,979,969	$	18,676,663
Contracts and grants receivable		117,680		203,774
Research and development incentives receivable		106,598		361,096
Prepaid expenses and other current assets		148,594		225,473
Total current assets		29,352,841		19,467,006
Security deposit		22,777		22,777
Office furniture and equipment, net of accumulated depreciation of $161,037 and $154,769		17,242		23,510
Deferred issuance cost		5,796		53,523
Right-of-use lease assets		167,608		228,027
Research and development incentives receivable		28,525		73,142
Other assets		15,500		23,250
Total assets	$	29,610,289	$	19,891,235
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	1,482,359	$	2,129,844
Accrued expenses		2,461,630		2,638,308
Accrued compensation		67,053		875,096
Paycheck Protection Program loan		—		324,979
Lease liabilities - current		113,664		112,294
Total current liabilities		4,124,706		6,080,521
Non-current liabilities:
Convertible debt, net of debt discount of $164,787 and $140,261		9,835,213		9,859,739
Paycheck Protection Program loan, net of current		—		92,851
Lease liabilities, net of current		54,180		116,296
Total liabilities		14,014,099		16,149,407
Commitments and contingencies
Shareholders’ equity:
Preferred stock, 350,000 shares authorized; none issued or outstanding		—		—
Common stock, $.001 par value; 75,000,000 shares authorized; 40,078,760 shares and 30,643,656 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		40,079		30,644
Additional paid-in capital		213,061,849		196,949,655
Accumulated other comprehensive loss		(32,058)		(24,337)
Accumulated deficit		(197,473,680)		(193,214,134)
Total shareholders’ equity		15,596,190		3,741,828
Total liabilities and shareholders’ equity	$	29,610,289	$	19,891,235

The accompanying notes are an integral part of these consolidated financial statements.

1

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2021 and 2020

(Unaudited)

		Three Months Ended			Six Months Ended
		June 30,			June 30,
	2021		2020		2021		2020
Revenues:
Contract revenue	$	—	$	292,461	$	33,351	$	1,137,647
Grant revenue		214,824		212,827		329,066		292,195
Total revenues		214,824		505,288		362,417		1,429,842
Cost of revenues		(204,317)		(363,339)		(326,677)		(1,192,844)
Gross profit		10,507		141,949		35,740		236,998
Operating expenses:
Research and development		2,104,872		2,170,045		3,472,272		4,870,216
General and administrative		915,280		785,776		1,806,720		1,654,443
Research and development expense – milestone		—		—		—		5,000,000
Total operating expenses		3,020,152		2,955,821		5,278,992		11,524,659
Loss from operations		(3,009,645)		(2,813,872)		(5,243,252)		(11,287,661)
Other income (expense):
Gain on forgiveness of PPP loan		421,584		—		421,584		—
Foreign currency transaction gain/(loss)		17,330		(3,583)		44,583		(26,818)
Interest (expense)/income		(214,750)		2,017		(428,255)		23,964
Research and development incentives		23,671		38,675		81,052		95,525
Net loss before income taxes		(2,761,810)		(2,776,763)		(5,124,288)		(11,194,990)
Income tax benefit		864,742		—		864,742		836,893
Net loss applicable to common stockholders	$	(1,897,068)	$	(2,776,763)	$	(4,259,546)	$	(10,358,097)
Basic and diluted net loss per share	$	(0.05)	$	(0.10)	$	(0.11)	$	(0.41)
Basic and diluted weighted average common shares outstanding		40,074,275		26,901,781		38,455,210		25,153,350

The accompanying notes are an integral part of these consolidated financial statements.

2

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Loss

For the Three and Six Months Ended June 30, 2021 and 2020

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Net loss	$	(1,897,068)	$	(2,776,763)	$	(4,259,546)	$	(10,358,097)
Other comprehensive loss:
Foreign currency translation adjustments		3,617		(8,184)		(7,721)		8,059
Comprehensive loss	$	(1,893,451)	$	(2,784,947)	$	(4,267,267)	$	(10,350,038)

The accompanying notes are an integral part of these consolidated financial statements.

3

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

For the Six Months Ended June 30, 2021 and 2020

(Unaudited)

						Accumulated
				Additional		Other
	Common Stock			Paid–In		Comprehensive		Accumulated
	Shares	Par Value		Capital		Loss		Deficit		Total
Balance, December 31, 2020	30,643,656	$	30,644	$	196,949,655	$	(24,337)	$	(193,214,134)	$	3,741,828
Issuance of common stock pursuant to B. Riley At Market Issuance Sales Agreement	9,435,091		9,435		16,480,894		—		—		16,490,329
Issuance costs associated with B. Riley At Market Issuance Sales Agreement	—		—		(544,177)		—		—		(544,177)
Exercise of warrants	13		—		51		—		—		51
Share-based compensation expense	—		—		175,426		—		—		175,426
Foreign currency translation adjustment	—		—		—		(7,721)		—		(7,721)
Net loss	—		—		—		—		(4,259,546)		(4,259,546)
Balance, June 30, 2021	40,078,760	$	40,079	$	213,061,849	$	(32,058)	$	(197,473,680)	$	15,596,190

						Accumulated
				Additional		Other
	Common Stock			Paid–In		Comprehensive		Accumulated
	Shares	Par Value		Capital		Loss		Deficit		Total
Balance, December 31, 2019	21,753,124	$	21,753	$	177,006,004	$	(45,010)	$	(175,525,612)	$	1,457,135
Issuance of common stock pursuant to B. Riley At Market Issuance Sales Agreement	4,545,116		4,545		9,455,404		—		—		9,459,949
Issuance costs associated with B. Riley At Market Issuance Sales Agreement	—		—		(425,524)		—		—		(425,524)
Issuance of common stock for milestone	1,956,182		1,956		4,998,044		—		—		5,000,000
Issuance of common stock to vendors	30,000		30		58,970		—		—		59,000
Exercise of stock options	2,189		2		—		—		—		2
Exercise of warrants	304,821		305		685,079		—		—		685,384
Share-based compensation expense	—		—		144,694		—		—		144,694
Foreign currency translation adjustment	—		—		—		8,059		—		8,059
Net loss	—		—		—		—		(10,358,097)		(10,358,097)
Balance, June 30, 2020	28,591,432	$	28,591	$	191,922,671	$	(36,951)	$	(185,883,709)	$	6,030,602

The accompanying notes are an integral part of these consolidated financial statements.

4

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

For the Three Months Ended June 30, 2021 and 2020

(Unaudited)

						Accumulated
				Additional		Other
	Common Stock			Paid–In		Comprehensive		Accumulated
	Shares	Par Value		Capital		Loss		Deficit		Total
Balance, March 31, 2021	40,020,461	$	40,020	$	212,890,844	$	(35,675)	$	(195,576,612)	$	17,318,577
Issuance of common stock pursuant to B. Riley At Market Issuance Sales Agreement	58,299		59		94,664		—		—		94,723
Issuance costs associated with B. Riley At Market Issuance Sales Agreement	—		—		(4,280)		—		—		(4,280)
Share-based compensation expense	—		—		80,621		—		—		80,621
Foreign currency translation adjustment	—		—		—		3,617		—		3,617
Net loss	—		—		—		—		(1,897,068)		(1,897,068)
Balance, June 30, 2021	40,078,760	$	40,079	$	213,061,849	$	(32,058)	$	(197,473,680)	$	15,596,190

						Accumulated
				Additional		Other
	Common Stock			Paid–In		Comprehensive		Accumulated
	Shares	Par Value		Capital		Loss		Deficit		Total
Balance, March 31, 2020	25,778,431	$	25,778	$	186,624,561	$	(28,767)	$	(183,106,946)	$	3,514,626
Issuance of common stock pursuant to B. Riley At Market Issuance Sales Agreement	2,813,001		2,813		5,467,910		—		—		5,470,723
Issuance costs associated with B. Riley At Market Issuance Sales Agreement	—		—		(250,803)		—		—		(250,803)
Share-based compensation expense	—		—		81,003		—		—		81,003
Foreign currency translation adjustment	—		—		—		(8,184)		—		(8,184)
Net loss	—		—		—		—		(2,776,763)		(2,776,763)
Balance, June 30, 2020	28,591,432	$	28,591	$	191,922,671	$	(36,951)	$	(185,883,709)	$	6,030,602

The accompanying notes are an integral part of these consolidated financial statements.

5

Soligenix, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2021 and 2020

(Unaudited)

	2021		2020
Operating activities:
Net loss	$	(4,259,546)	$	(10,358,097)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation		17,739		35,448
Non-cash lease expense		56,698		66,298
Share-based compensation		175,426		144,694
Issuance of common stock for milestone		—		5,000,000
Issuance of common stock for services		—		59,000
Amortization of deferred issuance costs associated with convertible debt		20,986		—
Gain on forgiveness of PPP loan		(421,584)		—
Change in operating assets and liabilities:
Contracts and grants receivable		86,094		684,048
Prepaid expenses and other current assets		76,879		434,877
Research and development incentives receivable		306,651		19,754
Operating lease liability		(56,698)		(67,004)
Accounts payable and accrued expenses		(838,749)		(136,035)
Accrued compensation		(808,043)		(221,513)
Total adjustments		(1,384,601)		6,019,567
Net cash used in operating activities		(5,644,147)		(4,338,530)
Investing activities:
Purchases of office furniture and equipment		—		(7,147)
Net cash used in investing activities		—		(7,147)
Financing activities:
Proceeds from issuance of common stock pursuant to B. Riley At Market Issuance Sales Agreement		16,490,329		9,459,949
Costs associated with B. Riley At Market Issuance Sales Agreement		(496,450)		(425,915)
Proceeds from the exercise of warrants		51		685,384
Costs associated with issuance of convertible debt		(45,512)		—
Principal repayment – financing lease		(4,048)		(3,664)
Proceeds from paycheck protection program		—		417,830
Net cash provided by financing activities		15,944,370		10,133,584
Effect of exchange rate on cash and cash equivalents		3,083		(40,310)
Net increase in cash and cash equivalents		10,303,306		5,747,597
Cash and cash equivalents at beginning of period		18,676,663		5,420,708
Cash and cash equivalents at end of period	$	28,979,969	$	11,168,305
Supplemental information:
Cash paid for state income taxes	$	7,382	$	—
Cash paid for interest	$	444,814	$	—
Cash paid for lease liabilities:
Operating lease	$	66,650	$	71,298
Financing lease	$	4,272	$	4,272
Non-cash activities:
Deferred issuance cost in accounts payable	$	—	$	85,657
Deferred issuance cost reclassified to additional-paid-in capital	$	47,727	$	85,266
Issuance of stock options, cash exercise price received in December 2019	$	—	$	1,882

The accompanying notes are an integral part of these consolidated financial statements.

6

Soligenix, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Nature of Business

Basis of Presentation

Soligenix, Inc. (the “Company”) is a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. The Company maintains two active business segments: Specialized BioTherapeutics and Public Health Solutions.

The Company’s Specialized BioTherapeutics business segment is developing and moving towards commercialization of HyBryte™ (a proposed proprietary name of SGX301 or synthetic hypericin), a novel photodynamic therapy utilizing topical synthetic hypericin activated with safe visible light for the treatment of cutaneous T-cell lymphoma (“CTCL”). With a successful Phase 3 study complete, regulatory approval is being sought and commercialization activities for this product candidate are being advanced initially in the United States (“U.S.”). Development programs in this business segment also include the Company’s first-in-class innate defense regulator technology, dusquetide (SGX942) for the treatment of inflammatory diseases, including oral mucositis in head and neck cancer, and proprietary formulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203) and acute radiation enteritis (SGX201).

The Company’s Public Health Solutions business segment includes active development programs for RiVax^®, its ricin toxin vaccine candidate and SGX943, a therapeutic candidate for antibiotic resistant and emerging infectious disease, and vaccine programs, including a program targeting filoviruses (such as Marburg and Ebola) and a program developing CiVax™, its vaccine candidate for the prevention of COVID-19 (caused by SARS-CoV-2). The development of the vaccine programs is currently supported by the heat stabilization technology, known as ThermoVax^®. To date, this business segment has been supported with government grant and contract funding from the National Institute of Allergy and Infectious Diseases (“NIAID”), the Biomedical Advanced Research and Development Authority and the Defense Threat Reduction Agency (“DTRA”).

The Company generates revenues under government grants primarily from the National Institutes of Health (“NIH”) and government contracts from NIAID. The Company has a subcontract of approximately $700,000 from a NIAID grant over five years for its thermostabilization technology, a DTRA subcontract of approximately $600,000 over three years for SGX943 and a subcontract of approximately $1.5 million from a NIAID grant over two years for development of CiVax™. The Company will continue to apply for additional government funding.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, development of new technological innovations, dependence on key personnel, protections of proprietary technology, compliance with the U.S. Food and Drug Administration (the “FDA”) regulations, and other regulatory authorities, litigation, and product liability.

Results for the three and six months ended June 30, 2021 are not necessarily indicative of results that may be expected for the full year.

7

Liquidity

In accordance with Accounting Standards Codification 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of June 30, 2021, the Company had an accumulated deficit of $197,473,680. During the six months ended June 30, 2021, the Company incurred a net loss of $4,259,546 and used $5,644,147 of cash in operating activities. The Company expects to continue to generate losses in the foreseeable future. The Company’s liquidity needs will be determined largely by the budgeted operational expenditures incurred in regards to the progression of its product candidates. The Company’s plans to meet its liquidity needs primarily include its ability to control the timing and spending on its research and development programs and raising additional funds through potential partnership and/or financings. Based on the Company’s approved operating budget, current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, cash available from the loan from Pontifax Medison Finance, proceeds received from the sale of shares of the Company’s common stock via the At Market Issuance Sales Agreement (“B. Riley Sales Agreement”) with B. Riley Securities, Inc., and management of the Company’s cash burn, management believes that its current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the next 12 months from issuance of the financial statements.

As of June 30, 2021, the Company had cash and cash equivalents of $28,979,969 as compared to $18,676,663 as of December 31, 2020, representing an increase of $10,303,306 or 55%. As of June 30, 2021, the Company had working capital of $25,228,135 as compared to working capital of $13,386,485 as of December 31, 2020, representing an increase of $11,841,650 or 88%. The increase in cash and working capital was primarily related to proceeds received from the utilization of the B. Riley Sales Agreement, partially offset by cash used in operating activities.

Management’s business strategy can be outlined as follows:

● Following positive primary endpoint results for the Phase 3 clinical trial of HyBryte™ as well as further statistically significant improvement in response rates with longer treatment (18 weeks compared to 12 and 6 weeks of treatment), pursue New Drug Application (“NDA”) filing and commercialization in the U.S. while continuing to explore ex-U.S. partnership.

● Continue to analyze the full dataset from the Phase 3 clinical trial of SGX942, including data from long-term (12 month) follow-up, to better understand why the study did not achieve the statistically significant benefit expected, despite demonstrating clinically meaningful reductions in oral mucositis consistent with the previous Phase 2 study. Any clarity gained from further analysis, especially with respect to specific subsets of patients that may benefit from SGX942 therapy, will be communicated to and discussed with the U.S. and/or European regulatory health authorities.

● Continue development of RiVax^® in combination with the Company’s ThermoVax^® technology to develop a new heat stable vaccine in biodefense with NIAID funding support.

● Continue to apply for and secure additional government funding for each of the Company’s Specialized BioTherapeutics and Public Health Solutions programs through grants, contracts and/or procurements.

● Pursue business development opportunities for the Company’s pipeline programs, as well as explore merger/acquisition strategies.

● Acquire or in-license new clinical-stage compounds for development, as well as evaluate new indications with existing pipeline compounds for development.

8

The Company’s plans with respect to its liquidity management include, but are not limited to, the following:

● The Company has up to $1.8 million in active government contract and grant funding still available as of June 30, 2021 to support its associated research programs through 2022, provided the federal agencies do not elect to terminate the contracts or grants for convenience. The Company plans to submit additional contract and grant applications for further support of its programs with various funding agencies;

● The Company has continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expects to continue to do so for the foreseeable future;

● The Company will continue to pursue Net Operating Loss (“NOL”) sales in the state of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program if available;

● The Company plans to pursue potential partnerships for pipeline programs as well as continue to explore merger and acquisition strategies. However, there can be no assurances that the Company can consummate such transactions;

● The Company has up to $10.0 million remaining available from the loan and security agreement with Pontifax Medison Finance as of August 13, 2021, which includes an immediately available $5 million line of credit and a $5 million late withdrawal loan that is contingent upon the initial filing of the NDA for CTCL;

● The Company has up to $2.0 million remaining from the B. Riley Sales Agreement as of August 13, 2021 under the prospectus supplement updated August 28, 2020; and

● The Company may seek additional capital in the private and/or public equity markets, to continue its operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. The Company is evaluating additional equity/debt financing opportunities on an ongoing basis and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated as a result of consolidation.

Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. The Company divides its operations into two operating segments: Specialized BioTherapeutics and Public Health Solutions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

9

Contracts and Grants Receivable

Contracts and grants receivable consist of amounts due from various grants from the NIH and contracts from NIAID, an institute of NIH, for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the respective governmental agencies in the month subsequent to period end and collected shortly thereafter. Accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.

Website Development Costs

In February 2019, Altamont Pharmaceutical Holdings, LLC, a company which owned 5% or more of the Company’s shares of common stock at the time, signed a service agreement with a third-party vendor to re-develop the Company’s website. Upon completion of the project at the end of June 2019, the Company capitalized the related website development costs of $46,500 in accordance with FASB Codification ASC 350-50 “Accounting for Web Site Development Costs.” During the quarter ended September 30, 2019, the Company began amortizing the website development costs on a straight-line basis over three years, the estimated useful life of the website. The Company will also review its capitalized website development costs periodically for impairment. Website amortization expense for the three months ended June 30, 2021 and 2020 was $3,875 and $3,875, respectively, and accumulated amortization was $31,000 and $15,502, respectively, as of June 30, 2021 and 2020. Website amortization expense for the six months ended June 30, 2021 and 2020 was $7,750 and $7,752, respectively.  Website development costs are included in other assets in the accompanying consolidated balance sheets.

Impairment of Long-Lived Assets

Office furniture and equipment, website development costs and intangible assets with finite lives are evaluated and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.

The Company did not record any impairment of long-lived assets for the three or six months ended June 30, 2021 or 2020.

Fair Value of Financial Instruments

FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on June 30, 2021. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

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The three levels of the fair value hierarchy are as follows:

● Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

● Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

● Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, contracts and grants receivable, research and development incentives receivable, accounts payable, accrued expenses, and accrued compensation approximate their fair value based on the short-term nature of these instruments.

The carrying amounts reported in the consolidated balance sheets for convertible debt and the loan under the Paycheck Protection Program approximate their fair value based on their maturity dates.

Revenue Recognition

The Company’s revenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs reimbursable internal expenses that are related to the government contracts and grants.

Research and Development Costs

Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocation of various corporate costs.

Share-Based Compensation

Stock options are issued with an exercise price equal to the market price on the date of grant. Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position, the options will expire within three months, unless otherwise extended by the Board.

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From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for services performed under the Company’s 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of stock options, restricted stock, deferred stock and unrestricted stock to the Company’s employees and non-employees (including consultants). The shares issued under the 2015 Plan are registered on Form S-8 (SEC File No. 333-208515). However, as shares of common stock are not covered by a reoffer prospectus, the certificates reflecting such shares reflect a Securities Act of 1933, as amended restrictive legend. Stock compensation expense for equity-classified awards to nonemployees is measured on the date of grant and is recognized when the services are performed.

The fair value of options issued during the six months ended June 30, 2021 and 2020 was estimated using the Black-Scholes option-pricing model and the following assumptions:

● a dividend yield of 0%;

● an expected life of 4 years;

● volatility of 87% for 2021 and 77% - 79% for 2020; and

● risk free interest rates of 0.27% - 0.60% for 2021 and 1.38% - 1.66% for 2020.

The fair value of each option grant made during the six months ended June 30, 2021 and 2020 was estimated on the date of each grant using the Black-Scholes option pricing model and recognized as share-based compensation expense ratably over the option vesting periods, which approximates the service period.

Foreign Currency Transactions and Translation

In 2018, the Company changed the status of a wholly owned subsidiary in the United Kingdom (“UK”) from inactive to active and incurred expenditures in multiple currencies including the U.S. dollar, the British Pound and the Euro to fund its clinical trial operations in the UK and select countries in Europe. In accordance with FASB ASC 830 Foreign Currency Matters, the UK subsidiary expresses its U.S. dollar and Euro denominated transactions in its functional currency, the British Pound, with related transaction gains or losses included in net income. On a quarterly basis, the financial statements of the UK subsidiary are translated into U.S. dollars and consolidated into the Company’s financials, with related translation adjustments reported as a cumulative translation adjustment (“CTA”), which is a component of accumulated other comprehensive loss. During the three months ended June 30, 2021 and 2020, the Company recognized a foreign currency transaction gain of $17,330 and a foreign currency transaction loss of $3,583, respectively, in the accompanying consolidated statements of operations.  During the six months ended June 30, 2021 and 2020, the Company recognized a foreign currency transaction gain of $44,583 and a foreign currency transaction loss of $26,818, respectively, in the accompanying consolidated statements of operations.

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Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence is considered, including the Company’s current and past performance, the market environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognized an income tax benefit of $864,742 and $836,893 from the sale of New Jersey NOL carryforwards during the six months ended June 30, 2021 and 2020, respectively. The Company recognized accrued interest and penalties associated with uncertain tax positions, if any as part of the income tax provision. There were no tax related interest and penalties recorded for the six months ended June 30, 2021 or 2020. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax positions at June 30, 2021 or December 31, 2020.

Research and Development Incentive Income and Receivable

The Company recognizes other income from UK research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The small or medium sized enterprise (“SME”) research and development tax relief program supports companies that seek to research and develop an advance in their field and is governed through legislative law by HM Revenue & Customs as long as specific eligibility criteria are met.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the SME research and development tax relief program described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. As a result, amounts realized under the SME research and development tax relief program are recorded as a component of other income.

The following table shows the change in the UK research and development incentives receivable from December 31, 2020 to June 30, 2021:

	Current		Long-Term		Total
Balance at December 31, 2020	$	361,096	$	73,142	$	434,238
UK research and development incentives, transfer		73,142		(73,142)		—
UK research and development incentives		—		29,159		29,159
Additional 2019 incentive earned		51,893		—		51,893
UK research and development incentives cash receipt		(383,933)		—		(383,933)
Foreign currency translation		4,400		(634)		3,766
Balance at June 30, 2021	$	106,598	$	28,525	$	135,123

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Loss Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing loss applicable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the entity. Since there is a significant number of options and warrants outstanding, fluctuations in the actual market price can have a variety of results for each period presented.

The following table summarizes potentially dilutive adjustments to the number of common shares which were excluded from the diluted calculation because their effect would be anti-dilutive due to the losses in each period:

	As of June 30,
	2021	2020
Common stock purchase warrants	5,731,464	5,886,817
Stock options	1,939,386	1,499,580
Total	7,670,850	7,386,397

The weighted average exercise price of the Company’s warrants and stock options outstanding at June 30, 2021 were $2.96 and $2.75 per share, respectively, and at June 30, 2020 were $2.92 and $3.20 per share, respectively.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions such as the fair value of warrants and stock options and to accrue for clinical trials in process that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and presentation.

Note 3. Leases

The Company classifies a lease for its office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey and a lease for a copy machine in the office as an operating lease and a financing lease, respectively, and recorded related right-of-use lease assets and lease liabilities accordingly. As of June 30, 2021 and December 31, 2020, the Company’s consolidated balance sheets included a right-of-use lease asset of $165,747 and $222,445 for the office space and $1,861 and $5,582 for the copy machine, respectively. Lease liabilities in the Company’s consolidated balance sheets as of June 30, 2021 and December 31, 2020 included corresponding lease liabilities of $165,743 and $222,441 for the office space and $2,101 and $6,149 for the copy machine, respectively.

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The following represents a reconciliation of contractual lease cash flows to the right-of-use lease assets and liabilities recognized in the financial statements:

	Operating		Financing
	Lease		Lease
Right-of-use lease asset:
Right-of-use lease asset, January 1,2021	$	222,445	$	5,582
Reduction/amortization		(56,698)		(3,721)
Right of use lease asset, June 30, 2021	$	165,747	$	1,861
Lease liability:
Lease liability, January 1, 2021	$	222,441	$	6,149
Repayments		(56,698)		(4,048)
Lease liability, June 30, 2021	$	165,743	$	2,101
Lease expense for the six months ended June 30, 2021:
Lease expense	$	66,650	$	—
Amortization expense		—		3,721
Interest expense		—		224
Total	$	66,650	$	3,945
Contractual cash payments for the remaining lease term as of June 30, 2021:
2021	$	66,650	$	2,136
2022		111,083		—
Total	$	177,733	$	2,136
Remaining lease term (months) as of June 30, 2021		16		3

Note 4. Accrued Expenses

The following is a summary of the Company’s accrued expenses:

	June 30,		December 31,
	2021		2020
Clinical trial expenses	$	2,442,105	$	2,510,111
Other		19,525		128,197
Total	$	2,461,630	$	2,638,308

Note 5. Debt

In December 2020, the Company entered into a $20.0 million convertible debt financing agreement with Pontifax Medison Debt Financing (“Pontifax”), the healthcare-dedicated venture and debt fund of the Pontifax life science funds. Under the terms of the agreement with Pontifax, the Company will have access to up to $20.0 million in convertible debt financing in three tranches, which will mature on June 15, 2025 and have an interest only period for the first two years with an interest rate of 8.47% on borrowed amounts and an interest rate of 1% on amounts available but not borrowed as an unused line of credit fee. The agreement is secured by a lien covering substantially all of the Company’s assets, other than intellectual property. The agreement contains customary representations, warranties and covenants, including covenants by the Company limiting additional indebtedness, liens, including on intellectual property, guaranties, mergers and consolidations, substantial asset sales, investments and loans, certain corporate changes, transactions with affiliates and fundamental changes. Upon the closing of this transaction, the Company accessed the first tranche of $10.0 million, and has the option to draw the second tranche of $5.0 million at any time by December 15, 2021 and the third tranche of $5.0 million upon filing of the HyBryte™ NDA, subject to certain conditions. Interest expense

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incurred and paid for the three and six month ended June 30, 2021 was $223,636 and $444,814, respectively. The Company amortized $10,831 and $20,986 of issuance costs during the three and six month period ended June 30, 2021, respectively. Net deferred issuance costs of $164,787 has been recorded as a reduction of the carrying value of the $10.0 million convertible debt borrowed as of June 30, 2021.

Pontifax may elect to convert the outstanding loan drawn into shares of the Company’s common stock at any time prior to repayment at a conversion price of $4.10 per share. The Company also has the ability to force the conversion of the loan into shares of the Company’s common stock at the same conversion price, subject to certain conditions.

Principal and interest payments due, assuming no conversion or additional borrowings over the next five years is as follows:

Year	Principal		Interest		Total
July 2021 to December 2021	$	—	$	452,186	$	452,186
2022		—		897,000		897,000
2023		4,000,000		769,138		4,769,138
2024		4,000,000		430,338		4,430,338
2025		2,000,000		110,566		2,110,566
Total	$	10,000,000	$	2,659,228	$	12,659,228

CARES Act Loan

In April 2020, the Company was advised that its principal bank, JPMorgan Chase Bank, N.A., had approved a $417,830 loan (the “Loan”) under the Paycheck Protection Program (“PPP”) pursuant to the Coronavirus Aid, Relief and Economic Security Act that was signed into law in March 2020.

As a U.S. small business, the Company qualified for the PPP, which allows businesses and nonprofits with fewer than 500 employees to obtain loans of up to $10 million to incentivize companies to maintain their workers as they manage the business disruptions caused by the COVID-19 pandemic. The PPP provides for loans for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The PPP loan proceeds may be used for eligible purposes, including payroll, benefits, rent and utilities.

The Loan had a term of two years, was unsecured, and was guaranteed by the Small Business Administration (“SBA”). The Loan bore interest at a fixed rate of 0.98% per annum, with interest and principal deferred during the eight-week or twenty-four-week period following the Loan origination date (“the loan forgiveness period”) and subsequent 10 months. Some or all of the Loan was eligible for forgiveness if at least 60% of the Loan proceeds were used by the Company to cover payroll costs, including benefits and if the Company maintained its employment and compensation within certain parameters during the loan forgiveness period and complied with other relevant conditions. The Company used the proceeds for purposes consistent with the PPP and met the conditions for forgiveness of the Loan.

On June 29, 2021, the SBA and JPMorgan notified the Company that the entire balance of this note has been forgiven. The Company recorded the forgiveness of the principal and accrued interest of $421,584 as a gain on forgiveness in other income on the consolidated statement of operations.

Note 6. Income Taxes

The Company had gross NOLs at December 31, 2020 of approximately $114 million for federal tax purposes, approximately $20 million for state tax purposes and approximately $1.2 million for foreign tax purposes. Federal losses generated in 2018 or later will carry forward indefinitely. In addition, the Company has approximately $8.2 million of various tax credits which expire from 2021 to 2037. The Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities. However, these NOLs are subject to various limitations under Internal Revenue Code (“IRC”) Section 382. IRC Section 382 limits the use of NOLs

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to the extent there has been an ownership change of more than 50 percentage points. In addition, the NOL carryforwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC Section 382 analysis, it is likely that the utilization of the NOLs may be substantially limited.

The Company and one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions. During 2021 and 2020, in accordance with the State of New Jersey’s Technology Business Tax Certificate Program, which allowed certain high technology and biotechnology companies to sell unused NOL carryforwards to other New Jersey-based corporate taxpayers, the Company sold New Jersey NOL carryforwards, resulting in the recognition of $864,742 and $836,893 of income tax benefit, net of transaction costs, during the six months ended June 30, 2021 and 2020, respectively. The Company has not yet sold its 2020 New Jersey NOLs but may be able to do so in the future. There can be no assurance as to the continuation or magnitude of this program in the future.

Note 7. Shareholders’ Equity

Preferred Stock

The Company has 350,000 shares of preferred stock authorized, none of which are issued or outstanding.

Common Stock

The following items represent transactions in the Company’s common stock for the six months ended June 30, 2021:

● During the six months ended June 30, 2021, the Company issued 13 shares of common stock as a result of a warrant exercise. The weighted average exercise price per warrant was $3.95.

● During the six months ended June 30, 2021, the Company issued 9,435,091 shares of common stock pursuant to the B. Riley Sales Agreement at a weighted average price of $1.75 per share.

The issuances of the Company’s common stock (a) as a result of the warrant exercise described above was registered on a Registration Statement on Form S-1, and (b) pursuant to the B. Riley Sales Agreement described above were registered on a Registration Statement on Form S-3.

B. Riley At Market Issuance Sales Agreement

In August 2017, the Company entered into the B. Riley Sales Agreement to sell shares of the Company’s common stock from time to time, through an “at-the-market” equity offering program under which B. Riley acts as sales agent. Under the B. Riley Sales Agreement, the Company sets the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales may be requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The B. Riley Sales Agreement provides that B. Riley is entitled to compensation for its services in an amount equal to 3% of the gross proceeds from the sale of shares sold under the B. Riley Sale Agreement. The Company has no obligation to sell any shares under the B. Riley Sales Agreement, and may suspend solicitation and offers under the B. Riley Sales Agreement at any time.

The Company’s shelf registration statement on Form S-3 (File No. 333- 217738) filed on May 5, 2017 (the “May 2017 Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) expired on August 10, 2020, but was available to be utilized for a period up to six months or until a new shelf registration statement was declared effective, whichever occurred first. All sales under the B. Riley Sales Agreement from August 11, 2017 through August 10, 2020 were made pursuant to the May 2017 Registration Statement.

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All sales of common stock made pursuant to the B. Riley Sales Agreement since the expiration of the May 2017 Registration Statement have been, and future sales will be, made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333- 239928) filed on July 17, 2020 (the “July 2020 Registration Statement”) with the SEC, and any amendments thereto, the base prospectus filed as part of such registration statement, and any prospectus supplements. The July 2020 Registration Statement was declared effective on August 28, 2020.

On August 28, 2020, the Company filed a prospectus supplement to the B. Riley Sales Agreement to offer and sell shares of Company common stock having an aggregate offering price of up to $20.0 million under the July 2020 Registration Statement. As of August 13, 2021, there was $2.0 million available for future sale of common stock under the B. Riley Sales Agreement.

Note 8. Concentrations

At June 30, 2021 and 2020, the Company had deposits in major financial institutions that exceeded the amount under protection by the Federal Deposit Insurance Corporation (“FDIC”). Currently, the Company is covered up to $250,000 by the FDIC and at times maintains cash balances in excess of the FDIC coverage.

Note 9. Commitments and Contingencies

Contractual Obligations

The Company has commitments of approximately $450,000 as of June 30, 2021 for several licensing agreements with consultants and universities. Additionally, the Company has collaboration and license agreements, which upon clinical or commercialization success, may require the payment of milestones of up to $7.9 million and/or royalties up to 6% of net sales of covered products, if and when achieved. However, there can be no assurance that clinical or commercialization success will occur.

The Company currently leases approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey pursuant to a lease that expires in October 2022. This office space currently serves as the Company’s corporate headquarters, and both of the Company’s business segments (Specialized BioTherapeutics and Public Health Solutions), operate from this space. The rent for the first 10 months of 2020 was approximately $11,883 per month, or $23.00 per square foot, and then decreased to approximately $11,108 per month, or $21.50 per square foot, starting November 2020, which rate will continue for the remainder of the lease period.

In September 2014, the Company entered into an asset purchase agreement with Hy Biopharma Inc. (“Hy Biopharma”) pursuant to which the Company acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic hypericin product. As consideration for the assets acquired, the Company paid $275,000 in cash and issued 184,912 shares of common stock with a fair value based on the Company’s stock price on the date of grant of $3.75 million. These amounts were charged to research and development expense during the third quarter of 2014 as the assets will be used in the Company’s research and development activities and do not have alternative future use pursuant to generally accepted accounting principles in the U.S. In March 2020, the Company issued 1,956,182 shares of common stock to Hy Biopharma as payment for achieving a milestone: the Company determining the Phase 3 clinical trial of HyBryte™ to be successful in the treatment of CTCL. The number of shares of common stock issued to Hy Biopharma was calculated using an effective price of $2.56 per share, based upon a formula set forth in the purchase agreement.

Provided the sole remaining future success-oriented milestone is attained, the Company will be required to make an additional payment of $5.0 million, if and when achieved. Such payment will be payable in restricted securities of the Company provided such number of shares do not exceed 19.9% ownership of the Company’s outstanding stock. As of June 30, 2021, no other milestone or royalty payments have been paid or accrued.

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In January 2020, the Company’s Board of Directors authorized the amendment of Dr. Schaber’s employment agreement to increase the number of shares of the Company’s common stock from 5,000 to 500,000 issuable to Dr. Schaber immediately prior to the completion of a transaction, or series or a combination of related transactions, negotiated by its Board of Directors whereby, directly or indirectly, a majority of its capital stock or a majority of its assets are transferred from the Company and/or its stockholders to a third party.

As a result of the above agreements, the Company has the following contractual obligations:

	Research and		Property and
Year	Development		Other Leases		Total
July 1 through December 31, 2021	$	50,000	$	68,786	$	118,786
2022		100,000		111,083		211,083
2023		100,000		—		100,000
2024		100,000		—		100,000
2025		100,000		—		100,000
Total	$	450,000	$	179,869	$	629,869

Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. A liability is only recorded if management determines that it is both probable and reasonably estimable.

COVID-19

Based on the current outbreak of SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, there could be additional repercussions to the Company’s operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.

The continued global spread of COVID-19 has affected the Company’s operations but did not have a material impact on its business, operating results, financial condition or cash flows as of and for the three and six months ended June 30, 2021. In particular, the third party manufacturers of HyBryte™ have experienced certain delays due to disruptions in their normal human operations, supply chain and other related logistical matters. In part due to these delays, the Company has decided not to pursue a rolling NDA submission for HyBryte™ at this time, in order to provide additional supportive data for inclusion in the NDA filing.

The future impact of the outbreak is highly uncertain and cannot be predicted, and the Company cannot provide any assurance that the outbreak will not have a material adverse impact on the Company’s operations or future results or filings with regulatory health authorities. The extent of the impact to the Company, if any, will depend on future developments, including actions taken to contain the coronavirus.

Emergent BioSolutions Legal Proceedings

In July 2020, the Company filed a demand for arbitration against Emergent BioSolutions, Inc. (“Emergent”) and certain of its subsidiaries with the American Arbitration Association in Mercer County, New Jersey. The Company alleges in the arbitration various breaches of contracts and warranties as well as acts of fraud. Emergent has answered that demand for arbitration denying the allegations and asserting affirmative defenses (see Part II, Item 1 – Legal Proceeding).

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The Company is seeking to recover damages in excess of $19 million from Emergent. While the Company intends to vigorously pursue this arbitration, the Company cannot offer any assurances that it will recover any damages from Emergent.

The Company has received invoices from Emergent related to the above matter. No accrual has been made for these invoices as management deems them invalid and not probable of being required to pay them based on the numerous breaches cited in the pending arbitration. These invoices total approximately $331,000.

Note 10. Operating Segments

The Company maintains two active operating segments: Specialized BioTherapeutics and Public Health Solutions. Each segment includes an element of overhead costs specifically associated with its operations, with its corporate shared services group responsible for support functions generic to both operating segments.

	Three Months Ended
	June 30,
	2021		2020
Revenues
Public Health Solutions	$	214,824	$	468,009
Specialized BioTherapeutics		—		37,279
Total	$	214,824	$	505,288
Loss from Operations
Public Health Solutions	$	(231,954)	$	(50,737)
Specialized BioTherapeutics		(1,720,566)		(1,808,652)
Corporate		(1,057,125)		(954,483)
Total	$	(3,009,645)	$	(2,813,872)
Amortization and Depreciation Expense
Public Health Solutions	$	311	$	7,318
Specialized BioTherapeutics		1,862		3,167
Corporate		6,667		7,317
Total	$	8,840	$	17,802
Other Income, Net
Specialized BioTherapeutics	$	41,001		35,091
Corporate		206,834		2,018
Total	$	247,835	$	37,109
Share-Based Compensation
Public Health Solutions	$	7,189	$	8,377
Specialized BioTherapeutics		28,731		18,962
Corporate		44,701		53,664
Total	$	80,621	$	81,003

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	Six Months Ended
	June 30,
	2021		2020
Revenues
Public Health Solutions	$	362,417	$	1,376,818
Specialized BioTherapeutics		—		53,024
Total	$	362,417	$	1,429,842
Loss from Operations
Public Health Solutions	$	(362,735)	$	(209,239)
Specialized BioTherapeutics		(2,832,974)		(9,166,503)
Corporate		(2,047,543)		(1,911,919)
Total	$	(5,243,252)	$	(11,287,661)
Amortization and Depreciation Expense
Public Health Solutions	$	627	$	14,621
Specialized BioTherapeutics		3,761		6,237
Corporate		13,351		14,590
Total	$	17,739	$	35,448
Other Income/(Loss), Net
Specialized BioTherapeutics	$	125,635	$	68,706
Corporate		(6,671)		23,965
Total	$	118,964	$	92,671
Share-Based Compensation
Public Health Solutions	$	13,484	$	17,842
Specialized BioTherapeutics		58,310		44,251
Corporate		103,632		82,601
Total	$	175,426	$	144,694

	As of		As of
	June 30,		December 31,
	2021		2020
Identifiable Assets
Public Health Solutions	$	123,427	$	176,447
Specialized BioTherapeutics		34,272		147,784
Corporate		29,452,590		19,567,004
Total	$	29,610,289	$	19,891,235

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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information to explain our results of operations and financial condition. You should also read our unaudited consolidated interim financial statements and their notes included in this Form 10-Q, and our audited consolidated financial statements and their notes, Risk Factors and other information included in our Annual Report on Form 10-K for the year ended December 31, 2020. We provide addresses to internet sites solely for the information to investors. We do not intend any addresses to be active links or to otherwise incorporate the contents of any website into this report.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current expectations about our future results, performance, prospects and opportunities. These forward-looking statements are not guarantees of future performance and are subject to significant risks, uncertainties, assumptions and other factors, which are difficult to predict and may cause actual results to differ materially from those expressed in, or implied by, any forward-looking statements. The forward-looking statements within this report may be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “may,” “would,” “will” and other similar expressions. However, these words are not the exclusive means of identifying these statements. Statements that are not historical facts are based on our current expectations, beliefs, assumptions, estimates, forecasts and projections for our business and the industry and markets related to our business and are forward-looking statements.

Actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Important factors which may affect these actual outcomes and results include, without limitation:

● uncertainty as to whether our product candidates will be sufficiently safe and effective to support regulatory approvals;

● uncertainty inherent in developing therapeutics and vaccines, and manufacturing and conducting preclinical and clinical trials;

● our ability to obtain future financing or funds when needed, either through the raising of capital, the incurrence of convertible or other indebtedness or through strategic financing or commercialization partnerships;

● that product development and commercialization efforts will be reduced or discontinued due to difficulties or delays in clinical trials or a lack of progress or positive results from research and development efforts;

● maintenance and progression of our business strategy;

● the possibility that our products under development may not gain market acceptance;

● our expectations about the potential market sizes and market participation potential for our product candidates may not be realized;

● our expected revenues (including sales, milestone payments and royalty revenues) from our product candidates and any related commercial agreements of ours may not be realized;

● the ability of our manufacturing partners to supply us or our commercial partners with clinical or commercial supplies of our products in a safe, timely and regulatory compliant manner and the ability of such partners to timely address any regulatory issues that have arisen or may arise in the future;

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● competition existing today or that may arise in the future, including the possibility that others may develop technologies or products superior to our products;

● the effect that global pathogens could have on financial markets, materials sourcing, service providers, patients, clinical study sites, governments and population (e.g. COVID-19); and

● other factors, including those “Risk Factors” set forth under Part II, Item 1A. “Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2020.

Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances occurring subsequent to the filing of this Form 10-Q with the United States Securities and Exchange Commission (the “SEC”) or for any other reason. You should carefully review and consider the various disclosures we make in this report and our other reports filed with the SEC that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business.

Our Business Overview

We are a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. We maintain two active business segments: Specialized BioTherapeutics and Public Health Solutions.

Our Specialized BioTherapeutics business segment is developing and moving towards commercialization of HyBryte™ (SGX301 or synthetic hypericin), a novel photodynamic therapy, utilizing topical synthetic hypericin activated with safe visible light for the treatment of cutaneous T-cell lymphoma (“CTCL”). With a successful Phase 3 study complete, regulatory approval is being sought and commercialization activities for this product candidate are being advanced initially in the United States (“U.S.”). Development programs in this business segment also include our first-in-class innate defense regulator technology, dusquetide (SGX942) for the treatment of inflammatory diseases, including oral mucositis in head and neck cancer, and proprietary formulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal (“GI”) disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203) and acute radiation enteritis (SGX201).

Our Public Health Solutions business segment includes active development programs for RiVax^®, our ricin toxin vaccine candidate and SGX943, our therapeutic candidate for antibiotic resistant and emerging infectious disease, and our vaccine programs targeting filoviruses (such as Marburg and Ebola) and CiVax™, our vaccine candidate for the prevention of COVID-19 (caused by SARS-CoV-2). The development of our vaccine programs incorporates the use of our proprietary heat stabilization platform technology, known as ThermoVax^®. To date, this business segment has been supported with government grant and contract funding from the National Institute of Allergy and Infectious Diseases (“NIAID”), the Biomedical Advanced Research and Development Authority and the Defense Threat Reduction Agency (“DTRA”).

An outline of our business strategy follows:

● Following positive primary endpoint results for the Phase 3 clinical trial of HyBryte™ as well as further statistically significant improvement in response rates with longer treatment (18 weeks compared to 12 and 6 weeks of treatment), pursue New Drug Application (“NDA”) filing and commercialization in the U.S. while continuing to explore ex-U.S. partnership.

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● Continue to analyze the full dataset from the Phase 3 clinical trial of SGX942, including data from long-term (12 month) follow-up, to better understand why the study did not achieve the statistically significant benefit expected, despite demonstrating clinically meaningful reductions in oral mucositis consistent with the previous Phase 2 study. Any clarity gained from further analysis, especially with respect to specific subsets of patients that may benefit from SGX942 therapy, will be communicated to and discussed with the U.S. and/or European regulatory health authorities.

● Continue development of RiVax^® (ricin toxin vaccine) and CiVax™ (COVID-19 vaccine) in combination with our ThermoVax^® technology to develop new heat stable vaccines in biodefense with NIAID funding support.

● Continue development of our therapeutic SGX943 and our vaccine programs targeting filoviruses (such as Marburg and Ebola) with DTRA and NIAID funding support.

● Continue to apply for and secure additional government funding for each of our Specialized BioTherapeutics and Public Health Solutions programs through grants, contracts and/or procurements.

● Pursue business development opportunities for our pipeline programs, as well as explore all strategic alternatives, including but not limited to merger/acquisition strategies.

● Acquire or in-license new clinical-stage compounds for development, as well as evaluate new indications with existing pipeline compounds for development.

Corporate Information

We were incorporated in Delaware in 1987 under the name Biological Therapeutics, Inc. In 1987, we merged with Biological Therapeutics, Inc., a North Dakota corporation, pursuant to which we changed our name to “Immunotherapeutics, Inc.” We changed our name to “Endorex Corp.” in 1996, to “Endorex Corporation” in 1998, to “DOR BioPharma, Inc.” in 2001, and finally to “Soligenix, Inc.” in 2009. Our principal executive offices are located at 29 Emmons Drive, Suite B-10, Princeton, New Jersey 08540 and our telephone number is (609) 538-8200.

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Our Product Candidates in Development

The following tables summarize our product candidates under development:

Specialized BioTherapeutics Product Candidates*

Soligenix Product
Candidate	Therapeutic Indication	Stage of Development
HyBryte™ (SGX301 or synthetic hypericin)	Cutaneous T-Cell Lymphoma	Phase 2 trial completed; demonstrated significantly higher response rate compared to placebo; Phase 3 trial completed; demonstrated statistical significance in primary endpoint in March 2020 (Cycle 1) and demonstrated continued improvement in treatment response with extended treatment in April 2020 (Cycle 2) and October 2020 (Cycle 3)
SGX942	Oral Mucositis in Head and Neck Cancer	Phase 2 trial completed; demonstrated significant response compared to placebo with positive long-term (12 month) safety also reported; Phase 3 clinical trial results announced December 2020: the primary endpoint of median duration of severe oral mucositis (“SOM”) did not achieve the pre-specified criterion for statistical significance (p≤0.05); although biological activity was observed with a 56% reduction in the median duration of SOM from 18 days in the placebo group to 8 days in the SGX942 treatment group
SGX203†	Pediatric Crohn’s disease	Phase 1/2 clinical trial completed; efficacy data, pharmacokinetic (PK)/pharmacodynamic (PD) profile and safety profile demonstrated; Phase 3 clinical trial initiation contingent upon additional funding, such as through partnership
SGX201†	Acute Radiation Enteritis	Phase 1/2 clinical trial completed; safety profile and preliminary efficacy demonstrated; further clinical development contingent upon additional funding, such as through partnership

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Public Health Solutions*†

Soligenix Product
Candidate	Therapeutic Indication	Stage of Development
ThermoVax®	Thermostability of vaccines for Ricin toxin, Ebola, Marburg and SARS-CoV-2 (COVID-19) viruses	Pre-clinical
RiVax®	Vaccine against Ricin Toxin Poisoning	Phase 1a and 1b trials completed, safety and neutralizing antibodies for protection demonstrated; Phase 1c trial initiated December 2019, closed January 2020
SGX943	Therapeutic against Emerging Infectious Diseases	Pre-clinical
CiVax™	Vaccine against COVID-19	Pre-clinical

* Timelines subject to potential disruption due to COVID-19 outbreak.

† Contingent upon continued government contract/grant funding or other funding source.

Specialized BioTherapeutics Overview

HyBryte™ (SGX301 or synthetic hypericin) – for Treating Cutaneous T-Cell Lymphoma

HyBryte™ is a novel, first-in-class, photodynamic therapy that utilizes safe visible light for activation. The active ingredient in HyBryte™ is synthetic hypericin, a photosensitizer which is topically applied to skin lesions and then activated by visible light 16 to 24 hours later. Hypericin is also found in several species of Hypericum plants, although the drug used in HyBryte™ is chemically synthesized by a proprietary manufacturing process and not extracted from plants. Importantly, hypericin is optimally activated with visible light thereby avoiding the negative consequences of ultraviolet light. Other light therapies using UVA or UVB light can result in serious adverse effects including secondary skin cancers.

Combined with photoactivation, in clinical trials synthetic hypericin has demonstrated significant anti-proliferative effects on activated normal human lymphoid cells and inhibited growth of malignant T-cells isolated from CTCL patients. In both settings, it appears that the mode of action is an induction of cell death in a concentration as well as a light dose-dependent fashion. These effects appear to result, in part, from the generation of singlet oxygen during photoactivation of hypericin.

Hypericin is one of the most efficient known generators of singlet oxygen, the key component for phototherapy. The generation of singlet oxygen induces necrosis and apoptosis in adjacent cells. The use of topical synthetic hypericin coupled with directed visible light results in generation of singlet oxygen only at the treated site. We believe that the use of visible light (as opposed to cancer-causing ultraviolet light) is a major advance in photodynamic therapy. In a published Phase 2 clinical study in CTCL, after six weeks of twice weekly therapy, a majority of patients experienced a statistically significant (p<0.04) improvement with HyBryte™ whereas the placebo was ineffective: 58.3% compared to 8.3%, respectively.

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HyBryte™ has received Orphan Drug designation as well as Fast Track designation from the U.S. Food and Drug Administration (“FDA”). The Orphan Drug Act is intended to assist and encourage companies to develop safe and effective therapies for the treatment of rare diseases and disorders. In addition to providing a seven-year term of market exclusivity for HyBryte™ upon final FDA approval, Orphan Drug designation also positions us to be able to leverage a wide range of financial and regulatory benefits, including government grants for conducting clinical trials, waiver of FDA user fees for the potential submission of an NDA for HyBryte™, and certain tax credits. In addition, Fast Track is a designation that the FDA reserves for a drug intended to treat a serious or life-threatening condition and one that demonstrates the potential to address an unmet medical need for the condition. Fast Track designation is designed to facilitate the development and expedite the review of new drugs. For instance, should events warrant, we will be eligible to submit a NDA for HyBryte™ on a rolling basis, permitting the FDA to review sections of the NDA prior to receiving the complete submission. Additionally, NDAs for Fast Track development programs ordinarily will be eligible for priority review. HyBryte™ for the treatment of CTCL also was granted Orphan Drug designation from the European Medicines Agency (“EMA”) Committee for Orphan Medical Products and Promising Innovative Medicine (“PIM”) designation from the Medicines and Healthcare Products Regulatory Agency (“MHRA”), as well as Innovation Passport under the Innovative Licensing and Access Pathway (“ILAP”) in the United Kingdom (“UK”).

In August 2018, the U.S. Patent Office granted us a patent titled “Systems and Methods for Producing Synthetic Hypericin” for the unique proprietary process manufacturing the highly purified form of synthetic hypericin, the active pharmaceutical ingredient in HyBryte™.

In October 2019, the U.S. Patent Office allowed the divisional patent application titled “Systems and Methods for Producing Synthetic Hypericin”. The allowed claims are directed to unique, proprietary methods to produce a novel, highly purified form of synthetic hypericin. This new divisional claim set expands on the previous issued claims in the parent U.S. patent.

In April 2020, the European patent office granted the divisional patent application titled “Formulations and Methods of Treatment of Skin Conditions” (No. 2932973). The granted claims are directed to the therapeutic use of synthetic hypericin in the treatment of CTCL. This new patent expands on our comprehensive patent estate, which includes protection on the composition of the purified synthetic hypericin, methods of synthesis and therapeutic methods of use in both CTCL and psoriasis, and is being pursued worldwide.

Based on the positive and previously published Phase 2 results, we initiated our pivotal Phase 3 clinical study of HyBryte™ for the treatment of CTCL during December 2015 and completed the trial in 2020. This trial, referred to as the “FLASH” study (Fluorescent Light Activated Synthetic Hypericin), aimed to evaluate the response to HyBryte™ as a skin directed therapy to treat early stage CTCL. We completed the study with approximately 35 CTCL centers across the U.S. participating in this pivotal trial. The Phase 3 protocol was a highly powered, double-blind, randomized, placebo-controlled, multicenter trial that enrolled 169 subjects (166 evaluable). The trial consisted of three treatment cycles, each of eight weeks duration. Treatments were administered twice weekly for the first six weeks and treatment response was determined at the end of the eighth week. In the first treatment cycle, approximately 66% of subjects received HyBryte™ and 33% received placebo treatment of their index lesions. In the second cycle, all subjects received HyBryte™ treatment of their index lesions, and in the third cycle, all subjects received HyBryte™ treatment of all of their lesions. The majority of subjects enrolled elected to continue into the third optional, open-label cycle of the study. Subjects were followed for an additional six months after their last evaluation visit. The primary efficacy endpoint was assessed on the percentage of patients in each of the two treatment groups (i.e., HyBryte™ and placebo) achieving a partial or complete response of the treated lesions, defined as a ≥ 50% reduction in the total Composite Assessment of Index Lesion Disease Severity (“CAILS”) score for three index lesions at the Cycle 1 evaluation visit (Week 8) compared to the total CAILS score at baseline. Secondary endpoints for the trial included the duration of responses, the extent of the regression of the tumors, and the safety of the treatment. We continue to work closely with the Cutaneous Lymphoma Foundation, as well as the National Organization for Rare Disorders.

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During September 2017, the National Cancer Institute (“NCI”), part of the National Institutes of Health (“NIH”) awarded us a Small Business Innovation Research (“SBIR”) grant of approximately $1.5 million over two years to support the conduct of our pivotal, Phase 3, randomized, double-blind, placebo-controlled study evaluating HyBryte™ as a treatment for CTCL. This grant was completed as of December 2019.

During October 2018, an Independent Data Monitoring Committee (“DMC”) completed an unblinded interim analysis with data from approximately 100 subjects, including an assessment of the Phase 3 FLASH study’s primary efficacy endpoint. The DMC provided a positive recommendation to randomize approximately 40 additional subjects into the trial to maintain the rigorous assumption of 90% statistical power for the primary efficacy endpoint. No safety concerns were reported by the DMC based on the interim analysis.

Positive primary endpoint analysis for the Phase 3 study for HyBryte™ was completed in March 2020. The study enrolled 169 patients (166 evaluable) randomized 2:1 to receive either HyBryte™ (116 patients) or placebo (50 patients) and demonstrated a statistically significant treatment response (p=0.04) in the CAILS primary endpoint assessment at 8 weeks for Cycle 1. A total of 16% of the patients receiving HyBryte™ achieved at least a 50% reduction in their index lesions compared to only 4% of patients in the placebo group at 8 weeks. HyBryte™ treatment in the first cycle was safe and well tolerated.

During April 2020, analysis of the second open-label treatment cycle (“Cycle 2”) was completed, showing that continued treatment with HyBryte™ twice weekly for an additional 6 weeks (12 weeks total) increased the positive response rate to 40% (p<0.0001 compared to placebo and p<0.0001 compared to 6-weeks treatment). After the subsequent additional 6-week treatment, the response rate in patients receiving a total of 12 weeks treatment increased two and a half-fold. Treatment responses were assessed at Week 8 (after 6 weeks of treatment) and at Week 16 (after 12 weeks of treatment). A positive response was defined as an improvement of at least 50% in the CAILS score for the three index lesions evaluated in both Cycles 1 and 2. The data continued to indicate that HyBryte™ is safe and well tolerated.

During October 2020, analysis of the optional third open-label treatment cycle (“Cycle 3”) was completed. Cycle 3 was focused on safety and all patients could elect to receive HyBryte™ treatment of all their lesions for an additional 6 weeks or up to 18 weeks in total. Of note, 66% of patients elected to continue with this optional safety cycle of the study. Of the subset of patients that received HyBryte™ throughout all three cycles of treatment (18 weeks), 49% of them demonstrated a treatment response (p=0.046 vs. patients completing 12 weeks of HyBryte™ treatment in Cycle 2; p<0.0001 vs. patients receiving placebo in Cycle 1). Moreover, in a subset of patients evaluated in this cycle, it was demonstrated that HyBryte™ is not systemically available, consistent with the general safety of this topical product observed to date. At the end of Cycle 3, HyBryte™ continued to be well tolerated despite extended and increased use of the product to treat multiple lesions.

In addition, continued analysis of results from the protocol mandated efficacy cycles (Cycles 1 and 2) of the study revealed that 12 weeks of treatment (Cycle 2) with HyBryte™ is equally effective on both patch (response 37%, p=0.0009) and plaque (response 42%, p<0.0001) lesions when compared to Cycle 1 placebo lesion responses, further demonstrating the unique benefits of the more deeply penetrating visible light activation of hypericin.

During January 2021, we signed an exclusive Supply, Distribution and Services Agreement with The Daavlin Distributing Co. (“Daavlin”), securing long-term supply and distribution of a commercially ready light device, which is an integral component of the regulatory and commercial strategy for HyBryte™ for the treatment of CTCL. Pursuant to the agreement, Daavlin will exclusively manufacture the proprietary light device for use with HyBryte™ for the treatment of CTCL. Upon approval of HyBryte™ by the FDA, we will promote HyBryte™ and the companion light device, and facilitate the direct purchase of the device from Daavlin. Daavlin will exclusively distribute and sell the HyBryte™ light device to us, physicians and patients.

In February 2021, the Hong Kong Registrar of Patents granted a patent for the application titled “Formulations and Methods of Treatment of Skin Conditions” (No. 16102842.8), published on January 29, 2021 under Publication No. 1214771 B. The granted claims are directed to the therapeutic use of synthetic hypericin in the

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treatment of CTCL, similar to those granted in Europe in 2020. This new patent is the first granted in Hong Kong and expands on our comprehensive patent estate, which includes protection on the composition of the purified synthetic hypericin, methods of synthesis and therapeutic methods of use in both CTCL and psoriasis.

In April 2021, the FDA conditionally accepted HyBryte™ (SGX301 or synthetic hypericin), in the treatment of early stage CTCL. The name HyBryte™ was developed in compliance with the FDA’s Guidance for Industry, Contents of a Complete Submission for the Evaluation of Proprietary Names. The FDA’s conditional approval validates HyBryte™ as a proprietary name that is consistent with the FDA’s goal of preventing medication errors and potential harm to the public by ensuring that only appropriate proprietary names are approved for use. Final approval of the HyBryte™ proprietary name is conditioned on FDA approval of the product candidate, SGX301.

During April 2021, Ellen Kim, MD, Medical Director, Dermatology Clinic, Perelman Center for Advanced Medicine, Professor of Dermatology at the Hospital of the University of Pennsylvania, and the Lead Principal Investigator for the Phase 3 FLASH study, delivered a presentation at the American Academy of Dermatology Association Virtual Meeting Experience. The presentation, which was designated “Top 12 Late-Breaking Research,” expanded on data related to the efficacy and safety of HyBryte™ in the treatment of CTCL.

In May 2021, HyBryte™ was awarded an "Innovation Passport" for the treatment of early stage CTCL in adults under the UK’s ILAP. The decision to award the Innovation Passport to the HyBryte™ program was made by the Innovative Licensing and Access Pathway Steering Group, which is comprised of representatives from MHRA, the National Institute for Health and Care Excellence (“NICE”), and the Scottish Medicines Consortium (“SMC”). ILAP was launched at the start of 2021 to accelerate the development and access to promising medicines, thereby facilitating patient access to new medicines. The pathway, part of the UK’s plan to attract life sciences development in the post-Brexit era, features enhanced input and interactions with the MHRA, NICE, and SMC. The innovation passport designation is the first step in the ILAP process and triggers the MHRA and its partner agencies to create a target development profile to chart out a roadmap for regulatory and development milestones with the goal of early patient access in the UK. Other benefits of ILAP include a 150-day accelerated assessment, rolling review and a continuous benefit risk assessment.

In May 2021, following discussions with the FDA regarding the HyBryte™ NDA submission and given delays in manufacturing, in part caused by the global COVID-19 pandemic, we decided not to pursue a rolling NDA submission at this time, in order to provide additional supportive data for inclusion in the NDA filing. We now plan to submit the NDA in the first half of 2022.

In May 2021, the Japan Patent Office allowed the patent application title “Systems and Methods for Producing Synthetic Hypericin”. The allowed claims are directed to unique, proprietary methods to produce a novel, highly purified form of synthetic hypericin, and are similar to those previously allowed in the U.S. This new patent is the first allowed in Japan covering the proprietary methods developed by us and further expands the comprehensive HyBryte™ patent estate, which includes protection of the composition of the purified synthetic hypericin, methods of synthesis and therapeutic methods of use in both CTCL and psoriasis, and is being pursued worldwide.

In June 2021, we received a Paediatric Investigation Plan (“PIP”) waiver from the EMA for HyBryte™. As part of the regulatory process for the registration of new medicines with the EMA, pharmaceutical companies are required to provide a PIP outlining their strategies for investigation of the new medicinal products in the pediatric population. In some instances, a waiver negating the need for a PIP for certain conditions may be granted by the EMA when development of a medicine for use in children is not feasible or appropriate, as is the case for HyBryte™ in CTCL which is extremely rare in children.

We estimate the potential worldwide market for HyBryte™ is in excess of $250 million for all applications, including the treatment of CTCL. This potential market information is a forward-looking statement, and investors are urged not to place undue reliance on this statement. While we have determined this potential market size based on assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.

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Cutaneous T-Cell Lymphoma

CTCL is a class of non-Hodgkin’s lymphoma (“NHL”), a type of cancer of the white blood cells that are an integral part of the immune system. Unlike most NHLs, which generally involve B-cell lymphocytes (involved in producing antibodies), CTCL is caused by an expansion of malignant T-cell lymphocytes (involved in cell-mediated immunity) normally programmed to migrate to the skin. These skin-trafficking malignant T-cells migrate to the skin, causing various lesions to appear that may change shape as the disease progresses, typically beginning as a rash and eventually forming plaques and tumors. Mycosis fungoides (“MF”) is the most common form of CTCL. It generally presents with skin involvement only, manifested as scaly, erythematous patches. Advanced disease with diffuse lymph node and visceral organ involvement is usually associated with a poorer response rate to standard therapies. A relatively uncommon sub-group of CTCL patients present with extensive skin involvement and circulating malignant cerebriform T-cells, referred to as Sézary syndrome. These patients have substantially graver prognoses (expected five-year survival rate of 24%), than those with MF (expected five-year survival rate of 88%).

CTCL mortality is related to stage of disease, with median survival generally ranging from about 12 years in the early stages to only 2.5 years when the disease has advanced. There is currently no FDA-approved drug for front-line treatment of early stage CTCL. Treatment of early-stage disease generally involves skin-directed therapies. One of the most common unapproved therapies used for early-stage disease is oral 5 or 8-methoxypsoralen (“Psoralen”) given with ultraviolet A (“UVA”) light, referred to as PUVA, which is approved for dermatological conditions such as disabling psoriasis not adequately responsive to other forms of therapy, idiopathic vitiligo and skin manifestations of CTCL in persons who have not been responsive to other forms of treatment. Psoralen is a mutagenic chemical that interferes with DNA causing mutations and other malignancies. Moreover, UVA is a carcinogenic light source that when combined with the Psoralen, results in serious adverse effects including secondary skin cancers; therefore, the FDA requires a Black Box warning for PUVA.

CTCL constitutes a rare group of NHLs, occurring in about 4% of the approximate 500,000 individuals living with NHL. We estimate, based upon review of historic published studies and reports and an interpolation of data on the incidence of CTCL, that it affects over 20,000 individuals in the U.S., with approximately 2,800 new cases seen annually.

Dusquetide

Dusquetide (research name: SGX94) is an innate defense regulator (“IDR”) that regulates the innate immune system to simultaneously reduce inflammation, eliminate infection and enhance tissue healing.

Dusquetide is based on a new class of short, synthetic peptides known as IDRs. It has a novel mechanism of action in that it modulates the body’s reaction to both injury and infection and is both simultaneously anti-inflammatory and anti-infective. IDRs have no direct antibiotic activity but modulate host responses, increasing survival after infections with a broad range of bacterial Gram-negative and Gram-positive pathogens including both antibiotic sensitive and resistant strains, as well as accelerating resolution of tissue damage following exposure to a variety of agents including bacterial pathogens, trauma and chemo- or radiation-therapy. IDRs represent a novel approach to the control of infection and tissue damage via highly selective binding to an intracellular adaptor protein, sequestosome-1, also known as p62, which has a pivotal function in signal transduction during activation and control of the innate defense system. Preclinical data indicate that IDRs may be active in models of a wide range of therapeutic indications including life-threatening bacterial infections as well as the severe side-effects of chemo- and radiation-therapy. Additionally, due to selective binding to p62, dusquetide may have potential anti-tumor action.

Dusquetide has demonstrated efficacy in numerous animal disease models including mucositis, colitis, skin infection and other bacterial infections and has been evaluated in a double-blind, placebo-controlled Phase 1 clinical trial in 84 healthy volunteers with both single ascending dose and multiple ascending dose components. Dusquetide was shown to have a good safety profile and be well-tolerated in all dose groups when administered

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by IV over 7 days and was consistent with safety results seen in pre-clinical studies. We believe that market opportunities for dusquetide include, but are not limited to, oral and GI mucositis, acute Gram-positive bacterial infections (e.g., methicillin resistant Staphylococcus aureus (MRSA)), acute Gram-negative infections (e.g., acinetobacter, melioidosis), and acute radiation syndrome.

SGX942 – for Treating Oral Mucositis in Head and Neck Cancer

SGX942 is our product candidate containing our IDR technology, dusquetide, targeting the treatment of oral mucositis in head and neck cancer patients. Oral mucositis in this patient population is an area of unmet medical need where there are currently no approved drug therapies. Accordingly, we received Fast Track designation for the treatment of oral mucositis as a result of radiation and/or chemotherapy treatment in head and neck cancer patients from the FDA. In addition, dusquetide has been granted PIM designation in the UK by the MHRA for the treatment of severe oral mucositis in head and neck cancer patients receiving chemoradiation therapy. The U.S. Patent and Trademark Office and the European Patent Office granted us the patent titled “Novel Peptides and Analogs for Use in the Treatment of Oral Mucositis” in August 2016 and January 2019, respectively. The newly issued patent claims therapeutic use of dusquetide and related IDR analogs, and adds to composition of matter claims for dusquetide and related analogs that have been granted in the U.S. and worldwide.

We initiated a Phase 2 clinical study of SGX942 for the treatment of oral mucositis in head and neck cancer patients in December of 2013. We completed enrollment in this trial in the second half of 2015, and in December 2015 released positive preliminary results. In this Phase 2 proof-of-concept clinical study that enrolled 111 patients, SGX942, at a dose of 1.5 mg/kg, successfully reduced the median duration of severe oral mucositis by 50%, from 18 days to 9 days (p=0.099) in all patients and by 67%, from 30 days to 10 days (p=0.040) in patients receiving the most aggressive chemoradiation therapy for treatment of their head and neck cancer. The p-values met the prospectively defined statistical threshold of p<0.1 in the study protocol. A less severe occurrence of oral mucositis, ulcerative oral mucositis (defined as oral mucositis with a WHO score ≥2 corresponding to the occurrence of overt ulceration in the mouth), was also monitored during the study. In the patients receiving the most aggressive chemoradiation therapy, the median duration of oral mucositis was found to decrease from 65 days in the placebo treated patients to 51 days in the patients treated with SGX942 1.5 mg/kg (p=0.099).

In addition to identifying the best dose of 1.5 mg/kg, this study achieved all objectives, including increased incidence of “complete response” of tumor at the one month follow-up visit (47% in placebo vs. 63% in SGX942 at 1.5 mg/kg). Decreases in mortality and decreases in infection rate were also observed with SGX942 treatment, consistent with the preclinical results observed in animal models.

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SGX942 was found to be generally safe and well tolerated, consistent with the safety profile observed in the prior Phase 1 study conducted in 84 healthy volunteers. The long-term (12 month) follow-up data was consistent with the preliminary positive safety and efficacy findings. While the placebo population experienced the expected 12-month survival rate of approximately 80%, as defined in the Surveillance, Epidemiology, and End Results statistics 1975-2012 from the National Cancer Institute, the SGX942 1.5 mg/kg treatment group reported a 12-month survival rate of 93% (7% mortality in the SGX942 1.5 mg/kg group compared to 19% in the placebo group). Similarly, tumor resolution (complete response) at 12 months was better in the SGX942 1.5 mg/kg treatment group relative to the placebo population (80% in the 1.5 mg/kg group compared to 74% in the placebo group). Moreover, in the patients receiving chemotherapy every third week, the SGX942 1.5 mg/kg treatment group had a tumor resolution rate (complete response) of 82% throughout the 12 months following chemoradiation therapy, while the placebo group experienced a 64% complete response rate. The long-term follow-up results from the Phase 2 study are reviewed in “Dusquetide: Reduction in Oral Mucositis associated with Enduring Ancillary Benefits in Tumor Resolution and Decreased Mortality in Head and Neck Cancer Patients” published online in Biotechnology Reports and available at the following link: https://doi.org/10.1016/j.btre.2017.05.002. In addition to safety, evaluations of other secondary efficacy endpoints, such as the utilization of opioid pain medication, indicated that the SGX942 1.5mg/kg treatment group had a 40% decrease in the use of opioids at the later stage of the treatment phase of the trial, when oral mucositis is usually most severe and expected to increase pain medication use. This was in contrast to the placebo group, which demonstrated a 10% increase in use of opioids over this same period. Data from this Phase 2 trial was published online in the Journal of Biotechnology. The publication also delineates the supportive nonclinical data in this indication, demonstrating consistency in the qualitative and quantitative biological response, including dose response, across the nonclinical and clinical data sets. The results are available at the following link: https://www.sciencedirect.com/science/article/pii/S0168165616315668?via%3Dihub.

In September 2016, we and SciClone Pharmaceuticals, Inc. (“SciClone”) entered into an exclusive license agreement, pursuant to which we granted rights to SciClone to develop, promote, market, distribute and sell SGX942 in defined territories. Under the terms of the license agreement, SciClone will be responsible for all aspects of development, product registration and commercialization in the territories, having access to data generated by us. In exchange for exclusive rights, SciClone will pay us royalties on net sales, and we will supply commercial drug product to SciClone on a cost-plus basis, while maintaining worldwide manufacturing rights.

During July 2017, we initiated our pivotal Phase 3 clinical trial referred to as the “DOM–INNATE” study (Dusquetide treatment in Oral Mucositis – by modulating INNATE immunity) with a controlled roll-out of U.S. study sites, followed by the addition of European centers in 2018. Approximately 50 U.S. and European oncology centers are participating in this pivotal Phase 3 study. Based on the positive and previously published Phase 2 results (Study IDR-OM-01), the pivotal Phase 3 clinical trial (Study IDR-OM-02) was a highly powered, double-blind, randomized, placebo-controlled, multinational trial that sought to enroll approximately 260 subjects with squamous cell carcinoma of the oral cavity and oropharynx who were scheduled to receive a minimum total cumulative radiation dose of 55 Gy fractionated as 2.0-2.2 Gy per day with concomitant cisplatin chemotherapy given as a dose of 80-100 mg/m² every third week. Subjects were randomized to receive either 1.5 mg/kg SGX942 or placebo given twice a week during and for two weeks following completion of chemoradiation therapy (“CRT”). The primary endpoint for the study was the median duration of SOM, which was assessed by oral examination at each treatment visit and then through six weeks following completion of CRT. Oral mucositis is evaluated using the WHO Grading system. SOM is defined as a WHO Grade of ≥3. Subjects are followed for an additional 12 months after the completion of treatment.

During September 2017, the National Institute of Dental and Craniofacial Research (“NIDCR”), part of the NIH, awarded us a SBIR grant of approximately $1.5 million over two years to support the conduct of our Phase 3, multinational, randomized, double-blind, placebo-controlled study evaluating SGX942 (dusquetide) as a treatment for severe oral mucositis in patients with head and neck cancer receiving CRT. This grant was completed as of August 2019.

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In April 2019, the U.S. Patent Office issued a new patent No. 10,253,068 titled “Novel Peptides for Treating and Preventing Immune-Related Disorders, Including Treating and Preventing Infection by Modulating Innate Immunity” for our dusquetide related analogs.

In April 2019, the Paediatric Committee of the EMA approved our PIP for SGX942, a prerequisite for filing a Marketing Authorization Application (“MAA”) for any new medicinal product in Europe. The EMA also agreed that we may defer conducting the PIP until successful completion of our ongoing pivotal Phase 3 clinical trial of SGX942, which allows us to file the adult indication MAA prior to completion of the PIP.

In August 2019, the NIDCR, part of the NIH, awarded us a Phase 1 SBIR grant of approximately $150,000 to support the evaluation of SGX942 (dusquetide) in pediatric indications. This award facilitated the assessment of SGX942 safety in juvenile animals, supporting future studies in pediatric populations, including oral mucositis indications in pediatric patients undergoing stem cell transplants and treatments for head and neck cancer.

During August 2019, an independent DMC completed an unblinded interim analysis with data from approximately 90 subjects, including an assessment of the Phase 3 DOM-INNATE study’s primary efficacy endpoint. The DMC provided a positive recommendation to randomize approximately 70 additional subjects into the trial to maintain the rigorous assumption of 90% statistical power for the primary efficacy endpoint. No safety concerns were reported by the DMC based on the interim analysis.

In February 2020, the Japanese Patent Office granted the patent titled “Novel Peptides and Analogs for Use in the Treatment of Oral Mucositis.” This allowance builds on similar intellectual property in the U.S., New Zealand, Australia and Singapore and patent applications pending in other jurisdictions worldwide. The new claims cover therapeutic use of dusquetide (active ingredient in SGX942) and related IDR analogs, and add to composition of matter claims for dusquetide and related analogs that have been granted in the U.S. and worldwide.

In June 2020, the pivotal Phase 3 DOM–INNATE study (Study IDR-OM-02) completed enrollment of 268 subjects. In December 2020, the results of our Phase 3 clinical trial for SGX942 showed that the primary endpoint of median duration of SOM did not achieve the pre-specified criterion for statistical significance (p≤0.05); although biological activity was observed with a 56% reduction in the median duration of SOM from 18 days in the placebo group to 8 days in the SGX942 treatment group. Despite this clinically meaningful improvement, the variability in the distribution of the data yielded a p-value that was not statistically significant. Other secondary endpoints supported the biological activity of dusquetide, including a statistically significant 50% reduction in the median duration of SOM in the per-protocol population, which decreased from 18 days in the placebo group to 9 days in the SGX942 treatment group (p=0.049), consistent with the findings in the Phase 2 trial (Study IDR-OM-01). Similarly, incidence of SOM also followed this biological trend as seen in the Phase 2 study, decreasing by 16% in the SGX942 treatment group relative to the placebo group in the per-protocol population. The per-protocol population was defined as the population receiving a minimum of 55 Gy radiation and at least 10 doses of study drug (placebo or SGX942) throughout the intended treatment period, with no major protocol deviations (e.g. breaks in study drug administration longer than 8 days between successive doses). We are analyzing the data to better determine why the study did not meet expectations. If there is any clarity gained from further analysis of the dataset, especially with respect to specific subsets of patients that may benefit from SGX942 therapy, we will communicate our findings and explore follow-up discussions with U.S. and/or European regulatory health authorities.

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Oral Mucositis

Mucositis is the clinical term for damage done to the mucosa by anticancer therapies. It can occur in any mucosal region, but is most commonly associated with the mouth, followed by the small intestine. We estimate, based upon our review of historic studies and reports, and an interpolation of data on the incidence of mucositis, that mucositis affects approximately 500,000 people in the U.S. per year and occurs in 40% of patients receiving chemotherapy. Mucositis can be severely debilitating and can lead to infection, sepsis, the need for parenteral nutrition and narcotic analgesia. The GI damage causes severe diarrhea. These symptoms can limit the doses and duration of cancer treatment, leading to sub-optimal treatment outcomes.

The mechanisms of mucositis have been extensively studied and have been linked to the interaction of chemotherapy and/or radiation therapy with the innate defense system. Bacterial infection of the ulcerative lesions is regarded as a secondary consequence of dysregulated local inflammation triggered by therapy-induced cell death, rather than as the primary cause of the lesions.

We estimate, based upon our review of historic studies and reports, and an interpolation of data on the incidence of oral mucositis, that oral mucositis is a subpopulation of approximately 90,000 patients in the U.S., with a comparable number in Europe. Oral mucositis almost always occurs in patients with head and neck cancer treated with radiation therapy (greater than 80% incidence of severe mucositis) and is common in patients undergoing high dose chemotherapy and hematopoietic cell transplantation, where the incidence and severity of oral mucositis depends greatly on the nature of the conditioning regimen used for myeloablation.

Oral BDP

Oral BDP represents a first-of-its-kind oral, locally acting therapy tailored to treat GI inflammation. BDP has been marketed in the U.S. and worldwide since the early 1970s as the active pharmaceutical ingredient in a nasal spray and in a metered-dose inhaler for the treatment of patients with allergic rhinitis and asthma. Oral BDP is specifically formulated for oral administration as a single product consisting of two tablets. One tablet is intended to release BDP in the upper sections of the GI tract and the other tablet is intended to release BDP in the lower sections of the GI tract.

Based on its pharmacological characteristics, oral BDP may have utility in treating other conditions of the GI tract having an inflammatory component. We are planning to pursue development programs for the treatment of pediatric Crohn’s disease, acute radiation enteritis and GI acute radiation syndrome pending further grant funding. We are also exploring the possibility of testing oral BDP for local inflammation associated with ulcerative colitis, among other indications.

In July 2019, the European Patent Office issued two patents, both titled “Topically Active Steroids for use in Radiation and Chemotherapeutic Injury”, following the expiration of the objection period. The new patents (#2,373,160 and #2,902,031) claim use of oral BDP for treatment of damage to the GI tract as a result of acute radiation injury, including total body irradiation in the accidental or biodefense context.

We estimate the potential worldwide market for oral BDP is in excess of $500 million for all applications, including the treatment of pediatric Crohn’s disease. This potential market information is a forward-looking statement, and investors are urged not to place undue reliance on this statement. While we have determined this potential market size based on assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.

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SGX203 – for Treating Pediatric Crohn’s Disease

SGX203 is a two tablet delivery system of BDP specifically designed for oral use that allows for administration of immediate and delayed release BDP throughout the small bowel and the colon. The FDA has given SGX203 Orphan Drug designation as well as Fast Track designation for the treatment of pediatric Crohn’s disease. We will pursue a pivotal Phase 3 clinical trial of SGX203 for the treatment of pediatric Crohn’s disease contingent upon additional funding, such as through partnership funding support.

Pediatric Crohn’s Disease

Crohn’s disease causes inflammation of the GI tract. Crohn’s disease can affect any area of the GI tract, from the mouth to the anus, but it most commonly affects the lower part of the small intestine, called the ileum. The swelling caused by the disease extends deep into the lining of the affected organ. The swelling can induce pain and can make the intestines empty frequently, resulting in diarrhea. Because the symptoms of Crohn’s disease are similar to other intestinal disorders, such as irritable bowel syndrome and ulcerative colitis, it can be difficult to diagnose. People of Ashkenazi Jewish heritage have an increased risk of developing Crohn’s disease.

Crohn’s disease can appear at any age, but it is most often diagnosed in adults in their 20s and 30s. However, approximately 30% of people with Crohn’s disease develop symptoms before 20 years of age. We estimate, based upon our review of historic published studies and reports, and an interpolation of data on the incidence of pediatric Crohn’s disease, that pediatric Crohn’s disease is a subpopulation of approximately 80,000 patients in the U.S. with a comparable number in Europe. Crohn’s disease tends to be both severe and extensive in the pediatric population and a relatively high proportion (approximately 40%) of pediatric Crohn’s patients have involvement of their upper GI tract.

Crohn’s disease presents special challenges for children and teens. In addition to bothersome and often painful symptoms, the disease can stunt growth, delay puberty, and weaken bones. Crohn’s disease symptoms may sometimes prevent a child from participating in enjoyable activities. The emotional and psychological issues of living with a chronic disease can be especially difficult for young people.

SGX201 – for Preventing Acute Radiation Enteritis

SGX201 is a delayed-release formulation of BDP specifically designed for oral use. In 2012, we completed a Phase 1/2 clinical trial testing SGX201 in prevention of acute radiation enteritis. Patients with rectal cancer scheduled to undergo concurrent radiation and chemotherapy prior to surgery were randomized to one of four dose groups. The objectives of the study were to evaluate the safety and maximal tolerated dose of escalating doses of SGX201, as well as the preliminary efficacy of SGX201 for prevention of signs and symptoms of acute radiation enteritis. The study demonstrated that oral administration of SGX201 was safe and well tolerated across all four dose groups. There was also evidence of a potential dose response with respect to diarrhea, nausea and vomiting and the assessment of enteritis according to National Cancer Institute Common Terminology Criteria for Adverse Events for selected GI events. In addition, the incidence of diarrhea was lower than that seen in published historical control data in this patient population. This program was supported in part by a $500,000 two-year SBIR grant awarded by the NIH. We continue to work with our Radiation Enteritis medical advisors to identify additional funding opportunities to support the clinical development program.

We have received Fast Track designation from the FDA for SGX201 for acute radiation enteritis.

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Acute Radiation Enteritis

External radiation therapy is used to treat most types of cancer, including cancer of the bladder, uterine, cervix, rectum, prostate, and vagina. During delivery of treatment, some level of radiation will also be delivered to healthy tissue, including the bowel, leading to acute and chronic toxicities. The large and small bowels are very sensitive to radiation and the larger the dose of radiation the greater the damage to normal bowel tissue. Radiation enteritis is a condition in which the lining of the bowel becomes swollen and inflamed during or after radiation therapy to the abdomen, pelvis, or rectum. Most tumors in the abdomen and pelvis need large doses, and almost all patients receiving radiation to the abdomen, pelvis, or rectum will show signs of acute enteritis.

Patients with acute enteritis may have nausea, vomiting, abdominal pain and bleeding, among other symptoms. Some patients may develop dehydration and require hospitalization. With diarrhea, the GI tract does not function normally, and nutrients such as fat, lactose, bile salts, and vitamin B12 are not well absorbed.

Symptoms will usually resolve within two to six weeks after therapy has ceased. Radiation enteritis is often not a self-limited illness, as over 80% of patients who receive abdominal radiation therapy complain of a persistent change in bowel habits. Moreover, acute radiation injury increases the risk of development of chronic radiation enteropathy, and overall 5% to 15% of the patients who receive abdominal or pelvic irradiation will develop chronic radiation enteritis.

We estimate, based upon our review of historic published studies and reports, and an interpolation of data on the treatment courses and incidence of cancers occurring in the abdominal and pelvic regions, there to be over 100,000 patients annually in the U.S., with a comparable number in Europe, who receive abdominal or pelvic external beam radiation treatment for cancer, and these patients are at risk of developing acute and chronic radiation enteritis.

Public Health Solutions Overview

ThermoVax^® – Thermostability Technology

ThermoVax^® is a novel method for thermostabilizing vaccines with a variety of adjuvants, resulting in a single vial which can be reconstituted with water for injection immediately prior to use.

One of the adjuvants utilized in ThermoVax^® is aluminum salts (known colloquially as Alum). Alum is the most widely employed adjuvant technology in the vaccine industry.

The value of ThermoVax^® lies in its potential ability to eliminate the need for cold chain production, transportation, and storage for Alum-adjuvanted vaccines. This would relieve the high costs of producing and maintaining vaccines under refrigerated conditions. Based on historical reports from the World Health Organization and other scientific reports, we believe that a meaningful proportion of vaccine doses globally are wasted due to excursions from required cold chain temperature ranges. This is due to the fact that many vaccines need to be maintained either between 2 and 8 degrees Celsius (“C”), frozen below -20 degrees C, or frozen below -60 degrees C, and even brief excursions from these temperature ranges usually necessitate the destruction of the product or the initiation of costly stability programs specific for the vaccine lots in question. ThermoVax^® has the potential to facilitate easier storage and distribution of strategic national stockpile vaccines for ricin exposure in emergency settings.

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ThermoVax^® development, specifically in the context of an Alum adjuvant, was supported pursuant to our $9.4 million NIAID grant enabling development of thermo-stable ricin (RiVax^®) and anthrax vaccines. Proof-of-concept preclinical studies with ThermoVax^® indicate that it is able to produce stable vaccine formulations using adjuvants, protein immunogens, and other components that ordinarily would not withstand long temperature variations exceeding customary refrigerated storage conditions. These studies were conducted with our Alum-adjuvanted ricin toxin vaccine, RiVax^® and our Alum-adjuvanted anthrax vaccine. Each vaccine was manufactured under precise lyophilization conditions using excipients that aid in maintaining native protein structure of the key antigen. When RiVax^® was kept at 40 degrees C (104 degrees Fahrenheit) for up to one year, all of the animals vaccinated with the lyophilized RiVax^® vaccine developed potent and high titer neutralizing antibodies. In contrast, animals that were vaccinated with the liquid RiVax^® vaccine kept at 40 degrees C did not develop neutralizing antibodies and were not protected against ricin exposure. The ricin A chain is extremely sensitive to temperature and rapidly loses the ability to induce neutralizing antibodies when exposed to temperatures higher than 8 degrees C. When the anthrax vaccine was kept for up to 16 weeks at 70 degrees C, it was able to develop a potent antibody response, unlike the liquid formulation kept at the same temperature. Moreover, we also have demonstrated the compatibility of our thermostabilization technology with other secondary adjuvants such as TLR-4 agonists.

We also entered into a collaboration agreement with Axel Lehrer, PhD of the Department of Tropical Medicine, Medical Microbiology and Pharmacology, John A. Burns School of Medicine, University of Hawaiʻi at Manoa (“UH Manoa”) and Hawaii Biotech, Inc. (“HBI”) to develop a heat stable subunit Ebola vaccine. Dr. Lehrer, a co-inventor of the Ebola vaccine with HBI, has shown proof of concept efficacy with subunit Ebola vaccines in non-human primates. The most advanced Ebola vaccines involve the use of vesicular stomatitis virus and adenovirus vectors – live, viral vectors which complicate the manufacturing, stability and storage requirements. Dr. Lehrer’s vaccine candidate is based on highly purified recombinant protein antigens, circumventing many of these manufacturing difficulties. Dr. Lehrer and HBI have developed a robust manufacturing process for the required proteins. Application of ThermoVax^® may allow for a product that can avoid the need for cold chain distribution and storage, yielding a vaccine ideal for use in both the developed and developing world. This agreement has expired in accordance with its terms.

In December 2010, we executed a worldwide exclusive license agreement with the University of Colorado (“UC”) for certain patents relating to ThermoVax^® in all fields of use. In April 2018, the UC delivered a notice of termination of our license agreement based upon our failure to achieve one of the development milestones: initiation of the Phase 1 clinical trial of the heat stabilization technology by March 31, 2018. After negotiating with the UC, we and the UC agreed to extend the termination date to October 31, 2018 in order to allow us time to agree upon a potential agreement that would allow us to keep the rights to, and to continue to develop, the heat stabilization technology or a product candidate containing the heat stabilization technology in our field of use.

During September 2017, we were awarded funding of approximately $700,000 over five years under a NIAID Research Project (R01) grant awarded to UH Manoa for the development of a trivalent thermostabilized filovirus vaccine (including protection against Zaire ebolavirus, Sudan ebolavirus and Marburg Marburgvirus). Previous collaborations demonstrated the feasibility of developing a heat stable subunit Ebola vaccine. Under the terms of the subaward, we will continue to support vaccine formulation development with our proprietary vaccine thermostabilization technology, ThermoVax^®. Ultimately, the objective is to produce a thermostable trivalent filovirus vaccine for protection against Ebola and related diseases, allowing worldwide distribution without the need for cold storage. Based on current U.S. government needs, efforts have recently been expanded to focus on a monovalent or bivalent vaccine to specifically address Marburg marburgvirus.

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In October 2018, in a series of related transactions, (a) we and the UC agreed to terminate the original license agreement, (b) the UC and VitriVax, Inc. (“VitriVax”) executed a worldwide exclusive license agreement for the heat stabilization technology for all fields of use, and (c) we and VitriVax executed a worldwide exclusive sublicense agreement, which was amended and restated in October 2020, for the heat stabilization technology for use in the fields of ricin and Ebola vaccines. We paid a $100,000 sublicense fee on the effective date of the sublicense agreement. Under the amended sublicense agreement, to maintain the sublicense we are obliged to pay a minimum annual royalty of $20,000 until first commercial sale of a sublicensed product, upon which point, we shall pay an earned royalty of 2% of net sales subject to a minimum royalty of $50,000 each year. We are also required to pay royalty on any sub-sublicense income based on a declining percentage of all sub-sublicense income calculated within the contractual period until reaching a minimum of 15% after two years. In addition, we are required to pay VitriVax milestone fees of: (a) $25,000 upon initiation of a Phase 2 clinical trial of the sublicensed product, (b) $100,000 upon initiation of a Phase 3 clinical trial of the sublicensed product, (c) $100,000 upon regulatory approval of a sublicensed product, and (d) $1 million upon achieving $10 million in aggregate net sales of a sublicensed product in the U.S. or equivalent. To date none of these milestones have been met.

During February 2019, European Journal of Pharmaceutics and Biopharmaceutics published a scientific article demonstrating the successful thermostabilization of an Alum-adjuvanted Ebola subunit vaccine candidate.

In March 2020, we entered into a research collaboration with Axel Lehrer, PhD of the Department of Tropical Medicine, Medical Microbiology and Pharmacology, John A. Burns School of Medicine, UH Manoa to further expand the filovirus collaboration to investigation of potential coronavirus vaccines, including for SARS-CoV-2 (causing COVID-19). This research collaboration will utilize the technology platform developed in the search for filovirus vaccines and will use well-defined surface glycoprotein(s) from one or more coronaviruses, which are expected to be protective for COVID-19.

During April 2020, we obtained an exclusive worldwide license for CiVax™, a novel vaccine adjuvant, from BTG Specialty Pharmaceuticals (“BTG”), a division of Boston Scientific Corporation, for the fields of coronavirus infection (including SARS-CoV-2, the cause of COVID-19), and pandemic flu. CiVax™ is a novel adjuvant, which has been shown to enhance both cell-mediated and antibody-mediated immunity. We and our collaborators, including UH Manoa and Dr. Axel Lehrer, have successfully demonstrated the utility of CiVax™ in the development of our heat stable filovirus vaccine program, with vaccine candidates against Ebola and Marburg virus disease. Given this previous success, CiVax™ will potentially be an important component of our vaccine technology platform currently being assessed for use against coronaviruses including SARS-CoV-2, the cause of COVID-19. The license agreement was executed between us and Protherics Medicines Development, one of the companies that make up the BTG specialty pharmaceutical business, which owns the CiVax™ intellectual property.

In September 2020, the Journal of Pharmaceutical Sciences published a scientific article detailing the thermostabilization of the filovirus GP proteins and key assays describing their stability (available at: https://www.jpharmsci.org/article/S0022-3549(20)30509-8/fulltext).

During October 2020, Frontiers in Immunology published a scientific article describing CiVax™, a prototype COVID-19 vaccine, using the novel CoVaccine HT™ adjuvant and demonstrating significant immunogenicity, including strong total and neutralizing antibody responses, with a balanced Th1 response, as well as enhancement of cell mediated immunity. These are all considered to be critical attributes of a potential COVID-19 vaccine. (available at: https://www.frontiersin.org/articles/10.3389/fimmu.2020.599587/full).

In December 2020, NIAID awarded us a Direct to Phase II SBIR grant of approximately $1.5 million to support manufacture, formulation (including thermostabilization) and characterization of COVID-19 and Ebola Virus Disease (“EVD”) vaccine candidates in conjunction with the CoVaccine HT™ adjuvant. This award also is supporting immune characterization of this novel, emulsified adjuvant that has unique potency and compatibility with lyophilization strategies to enable thermostabilization of subunit vaccines.

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During March 2021, bioRxiv published an accelerated preprint of pre-clinical immunogenicity studies for CiVax™, demonstrating rapid-onset, broad-spectrum, neutralizing antibody and cell-mediated immunity is confirmed using full-length Spike protein antigens. The article, titled “Recombinant protein subunit SARS-CoV-2 vaccines formulated with CoVaccine HT™ adjuvant induce broad, Th1 biased, humoral and cellular immune responses in mice,” (available at: https://www.biorxiv.org/content/10.1101/2021.03.02.433614v1).

RiVax^® – Ricin Toxin Vaccine

RiVax^® is our proprietary vaccine candidate being developed to protect against exposure to ricin toxin and if approved, would be the first ricin vaccine. The immunogen in RiVax^® induces a protective immune response in animal models of ricin exposure and functionally active antibodies in humans. The immunogen consists of a genetically inactivated ricin A chain subunit that is enzymatically inactive and lacks residual toxicity of the holotoxin. RiVax^® has demonstrated statistically significant (p < 0.0001) preclinical survival results, providing 100% protection against acute lethality in an aerosol exposure non-human primate model (Roy et al, 2015, Thermostable ricin vaccine protects rhesus macaques against aerosolized ricin: Epitope-specific neutralizing antibodies correlate with protection, PNAS USA 112:3782-3787), and has also been shown to be well tolerated and immunogenic in two Phase 1 clinical trials in healthy volunteers. Results of the first Phase 1 human trial of RiVax^® established that the immunogen was safe and induced antibodies that we believe may protect humans from ricin exposure. The antibodies generated from vaccination, concentrated and purified, were capable of conferring immunity passively to recipient animals, indicating that the vaccine was capable of inducing functionally active antibodies in humans. The outcome of this study was published in the Proceedings of the National Academy of Sciences (Vitetta et al., 2006, A Pilot Clinical Trial of a Recombinant Ricin Vaccine in Normal Humans, PNAS, 103:2268-2273). The second trial which was completed in September 2012 and was sponsored by University of Texas Southwestern Medical Center (“UTSW”), evaluated a more potent formulation of RiVax^® that contained an Alum adjuvant. The results of the Phase 1b study indicated that Alum-adjuvanted RiVax^® was safe and well tolerated, and induced greater ricin neutralizing antibody levels in humans than adjuvant-free RiVax^®. The outcomes of this second study were published in the Clinical and Vaccine Immunology (Vitetta et al., 2012, Recombinant Ricin Vaccine Phase 1b Clinical Trial, Clin. Vaccine Immunol. 10:1697-1699). We have adapted the original manufacturing process for the immunogen contained in RiVax^® for thermostability and large scale manufacturing and recent studies have confirmed that the thermostabilized RiVax^® formulation enhances the stability of the RiVax^® antigen, enabling storage for at least 1 year at temperatures up to 40°C (104 °F). The program will pursue approval via the FDA “Animal Rule” since it is not possible to test the efficacy of the vaccine in a clinical study which would expose humans to ricin. Uniform, easily measured and species-neutral immune correlates of protection that can be measured in humans and animals, and are indicative of animal survival to subsequent ricin challenge, are central to the application of the “Animal Rule”. Recent work has identified such potential correlates of immune protection in animals and work to qualify and validate these approaches is continuing, with the goal of utilizing these assays in a planned Phase 1/2 clinical trial with the thermostable RiVax^® formulation. During September 2018, we published an extended stability study of RiVax^®, showing up to 100% protection in mice after 12 months storage at 40°C (104 °F) as well as identification of a potential in vitro stability indicating assay, critical to adequately confirming the long-term shelf life of the vaccine. We have entered into a collaboration with IDT Biologika GmbH (“IDT”) to scale-up the formulation/filling process and continue development and validation of analytical methods established at IDT to advance the program. We also have initiated a development agreement with Emergent BioSolutions, Inc. to implement a commercially viable, scalable production technology for the RiVax^® drug substance protein antigen.

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The development of RiVax^® has been sponsored through a series of overlapping challenge grants, UC1, and cooperative grants, U01, from the NIH, granted to us and to UTSW where the vaccine originated. The second clinical trial was supported by a grant from the FDA’s Office of Orphan Products to UTSW. To date, we and UTSW have collectively received approximately $25 million in grant funding from the NIH for the development of RiVax^®. In September 2014, we entered into a contract with the NIH for the development of RiVax^® pursuant to which we have been awarded an additional $21.2 million of funding in the aggregate. The development agreements with Emergent BioSolutions, Inc. and IDT were specifically funded under this NIH contract.

In 2017, NIAID exercised options to fund additional animal efficacy studies and good manufacturing practices compliant RiVax^® bulk drug substance and finished drug product manufacturing, which is required for the conduct of future preclinical and clinical safety and efficacy studies. The exercised options provide us with approximately $4.5 million in additional non-dilutive funding, bringing the total amount awarded to date under this contract to $21.2 million, which expired in February 2021 The total award of up to $21.2 million supported the preclinical, manufacturing and clinical development activities necessary to advance heat stable RiVax^® with the FDA. In addition to this funding for the development of RiVax^®, biomarkers for RiVax^® testing have been successfully identified, facilitating potential approval under the FDA Animal Rule.

During December 2019, we initiated a third Phase 1 double-blind, placebo-controlled, randomized study in eight healthy adult volunteer subjects designed to evaluate the safety and immunogenicity of RiVax^® utilizing ThermoVax^®. During January 2020, we suspended the study after Emergent Manufacturing Operations Baltimore LLC (“EMOB”), the manufacturer of the drug substance, notified us that, after releasing the final drug product to us, EMOB identified that the active drug substance tested outside the established specification parameters. Two subjects had received doses as part of the study before the manufacturer provided this notice. Those two subjects were monitored with no safety issues noted and data was captured in accordance with the study protocol. They did not receive further doses of study drug. A final study report is in preparation.

During April 2020, we received notification from NIAID that they would not be exercising the final contract option to support the conduct of a Phase 1/2 clinical study in healthy volunteers. As a result, the total contract award will not exceed $21.2 million. This contract expired in February 2021.

In connection with failures relating to the manufacture of RiVax^® bulk drug substance, on July 1, 2020, we filed a demand for arbitration against Emergent BioSolutions, Inc. (“EBS”), Emergent Product Development Gaithersburg, Inc. (“EPDG”); and EMOB (together with EBS and EPDG, “Emergent”) with the American Arbitration Association in Mercer County, New Jersey. We have alleged that (a) EPDG breached contracts, an express warranty, a warranty of merchantability, and a warranty of fitness for a particular purpose, (b) EMOB breached a contract; (c) EPDG was unjustly enriched; (d) EPDG and EMOB were negligent in the performance of their work; and (e) EBS fraudulently induced us into entering into the contracts with EPDG and EMOB. We are seeking to recover damages in excess of $19 million from Emergent. Emergent has answered the demand for arbitration denying the allegations and asserting affirmative defenses. While we intend to vigorously pursue this arbitration, we cannot offer any assurances as to any result from the arbitration or that we will recover any damages from Emergent. For more details regarding the arbitration against Emergent, see Part II – Item 1. “Legal Proceedings” in this Quarterly Report.

RiVax^® has been granted Orphan Drug designation as well as Fast Track designation by the FDA for the prevention of ricin intoxication. In addition, RiVax^® has also been granted Orphan Drug designation in the European Union from the EMA Committee for Orphan Medical Products.

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Assuming development efforts are successful for RiVax^®, we believe potential government procurement contract(s) could reach as much as $200 million. This potential procurement contract information is a forward-looking statement, and investors are urged not to place undue reliance on this statement. While we have determined this potential procurement contract value based on assumptions that we believe are reasonable, there are a number of factors that could cause our expectations to change or not be realized.

As a new chemical entity, an FDA approved RiVax^® vaccine has the potential to qualify for a biodefense Priority Review Voucher (“PRV”). Approved under the 21st Century Cures Act in late 2016, the biodefense PRV is awarded upon approval as a medical countermeasure when the active ingredient(s) have not been otherwise approved for use in any context. PRVs are transferable and can be sold, with sales in recent years of approximately $100 million. When redeemed, PRVs entitle the user to an accelerated review period of nine months, saving a median of seven months review time as calculated in 2009. However, FDA must be advised 90 days in advance of the use of the PRV and the use of a PRV is associated with an additional user fee ($2.2 million for fiscal year 2020).

Ricin Toxin

Ricin toxin can be cheaply and easily produced, is stable over long periods of time, is toxic by several routes of exposure and thus has the potential to be used as a biological weapon against military and/or civilian targets. As a bioterrorism agent, ricin could be disseminated as an aerosol, by injection, or as a food supply contaminant. The potential use of ricin toxin as a biological weapon of mass destruction has been highlighted in a Federal Bureau of Investigation Bioterror report released in November 2007 titled Terrorism 2002-2005, which states that “Ricin and the bacterial agent anthrax are emerging as the most prevalent agents involved in WMD investigations” (http://www.fbi.gov/stats-services/publications/terrorism-2002-2005/terror02_05.pdf). In recent years, Al Qaeda in the Arabian Peninsula has threatened the use of ricin toxin to poison food and water supplies and in connection with explosive devices. Domestically, the threat from ricin remains a concern for security agencies. In April 2013, letters addressed to the U.S. President, a Senator and a judge tested positive for ricin. As recently as September 2020, ricin-laced letters addressed to the White House and others addressed to Texas law enforcement agencies were intercepted before delivery raising fresh concerns about the deadly toxin.

The Centers for Disease Control and Prevention has classified ricin toxin as a Category B biological agent. Ricin works by first binding to glycoproteins found on the exterior of a cell, and then entering the cell and inhibiting protein synthesis leading to cell death. Once exposed to ricin toxin, there is no effective therapy available to reverse the course of the toxin. The recent ricin threat to government officials has heightened the awareness of this toxic threat. Currently, there is no FDA approved vaccine to protect against the possibility of ricin toxin being used in a terrorist attack, or its use as a weapon on the battlefield nor is there a known antidote for ricin toxin exposure.

SGX943 – for Treating Emerging and/or Antibiotic-Resistant Infectious Diseases

SGX943 is an IDR, containing the same active ingredient as SGX942. Dusquetide is a fully synthetic, 5-amino acid peptide with high aqueous solubility and stability. Extensive in vivo preclinical studies have demonstrated enhanced clearance of bacterial infection with SGX943 administration. SGX943 has shown efficacy against both Gram-negative and Gram-positive bacterial infections in preclinical models, independent of whether the bacteria is antibiotic-resistant or antibiotic-sensitive.

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The innate immune system is responsible for rapid and non-specific responses to combat bacterial infection. Augmenting these responses represents an alternative approach to treating bacterial infections. In animal models, IDRs are efficacious against both antibiotic-sensitive and antibiotic-resistant infections, both Gram-positive and Gram-negative bacteria, and are active irrespective of whether the bacteria occupies a primarily extracellular or intracellular niche. IDRs are also effective as stand-alone agents or in conjunction with antibiotics. An IDR for the treatment of serious bacterial infections encompasses a number of clinical advantages including:

● Treatment when antibiotics are contraindicated, such as:

o before the infectious organism and/or its antibiotic susceptibility is known; or

o in at-risk populations prior to infection.

● An ability to be used as an additive, complementary treatment with antibiotics, thereby:

o enhancing efficacy of sub-optimal antibiotic regimens (e.g., partially antibiotic-resistant infections);

o enhancing clearance of infection, thereby minimizing the generation of antibiotic resistance (e.g., in treating melioidosis); and

o reducing the required antibiotic dose, again potentially minimizing the generation of antibiotic resistance.

● An ability to modulate the deleterious consequences of inflammation in response to the infection, including the inflammation caused by antibiotic-driven bacterial lysis.

● Being unlikely to generate bacterial resistance since the IDR acts on the host, and not the pathogen.

Importantly, systemic inflammation and multi-organ failure is the ultimate common outcome of not only emerging and/or antibiotic-resistant infectious diseases, but also of most biothreat agents (e.g., Burkholderia pseudomallei), indicating that dusquetide would be applicable not only to antibiotic-resistant infection, but also to biothreat agents, especially where the pathogen is not known and/or has been engineered for enhanced antibiotic resistance.

In May 2019, we were awarded a DTRA subcontract of approximately $600,000 over three years to participate in a biodefense contract for the development of medical countermeasures against bacterial threat agents. As of June 30, 2021, there was negligible revenue earned or expense incurred related to the DTRA subcontract.

Critical Accounting Policies

Our management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses, and related disclosure of contingent assets and liabilities. We base our estimate on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstance, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and judgments on an on-going basis. Our actual results may differ from these estimates under different assumptions or conditions.

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While our significant accounting policies are described in more detail in the notes to our financial statements appearing at the beginning of this Quarterly Report on Form 10-Q, we believe that the following accounting policies are the most critical to the judgments and estimates used in the preparation of our financial statements.

Revenue Recognition

Our revenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when we incur reimbursable internal expenses that are related to the government contracts and grants.

Research and Development Costs

As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contract and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued research and development expenses include fees paid to:

● contract research organizations (“CROs”) in connection with performing research activities on our behalf and conducting preclinical studies and clinical trials on our behalf;

● investigative sites or other service providers in connection with clinical trials;

● vendors in connection with preclinical and clinical development activities; and

● vendors related to product manufacturing and development and distribution of preclinical supplies.

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs that conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of the agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the success and completion of clinical trial milestones. In accruing fees, we estimate the time period over which services will be performed, enrollment of patients, number of sites active and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or amount of prepaid expense accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low in any particular period. To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions such as the fair value of warrants and stock options and recovery of the useful life of intangibles that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.

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Material Changes in Results of Operations

Three and Six Months Ended June 30, 2021 Compared to June 30, 2020

For the three months ended June 30, 2021, we had a net loss of $1,897,068 as compared to a net loss of $2,776,763 for the same period in the prior year, representing a decrease in the net loss of $879,695 or 46%. This decrease in net loss was primarily due to the gain on the forgiveness of the PPP loan and the sale of New Jersey NOL carryforwards offset by reduced contract revenues and the interest expense on convertible debt.  For the six months ended June 30, 2021, we had a net loss of $4,259,546 as compared to a net loss of $10,358,097 for the same period in the prior year, representing a decrease in the net loss of $6,098,551 or 59%. This decrease in net loss was primarily the result of the issuance of $5,000,000 of common stock as a milestone payment to Hy Biopharma, Inc. (“Hy Biopharma”) triggered by the successful Phase 3 clinical trial of SGX301 for the treatment of CTCL in the prior year that was not a part of the current year activity and reduced research and development spending primarily attributable to the conclusion of the CTCL and oral mucositis trials, slightly offset by reduced net grant and contract revenues in our Public Health Solutions business segment.

Our revenues and associated costs incurred relate to the government contracts and grants awarded in support of RiVax^®, our ricin toxin vaccine candidate; grants received to support the development of SGX943 for treatment of emerging and/or antibiotic-resistant infectious diseases; ThermoVax^®, our thermostabilization technology; and CiVax™, our vaccine candidate for the prevention of COVID-19. For the three months ended June 30, 2021, we had revenues of $214,824 as compared to $505,288 for the same period in the prior year, representing a decrease of $290,464 or 57%. We also incurred costs related to those revenues for the three months ended June 30, 2021 and 2020 of $204,317 and $363,339, respectively, representing a decrease of $159,022 or 44%. Our gross profit for the three months ended June 30, 2021 was $10,507 or 5% of revenues, as compared to a gross profit $141,949 or 28% of revenues for the same period in 2020, representing a decrease of $131,442 or 93%. The decrease in revenues and gross profit were primarily the result of the completion of the RiVax^® contract.  For the six months ended June 30, 2021, we had revenues of $362,417 as compared to $1,429,842 for the same period in the prior year, representing a decrease of $1,067,425 or 75%. We also incurred costs related to those revenues for the six months ended June 30, 2021 and 2020 of $326,677 and $1,192,844, respectively, representing a decrease of $866,167 or 73%. Our gross profit for the six months ended June 30, 2021 was $35,740 or 10% of revenues, as compared to a gross profit $236,998 or 17% of revenues for the same period in 2020, representing a decrease of $201,258 or 85%. The decrease in revenues and gross profit were primarily the result of the completion of the RiVax^® contract.

Research and development expenses were $2,104,872 for the three months ended June 30, 2021 as compared to $2,170,045 for the same period in 2020, representing a decrease of $65,173 or 3%. Research and development expenses were $3,472,272 for the six months ended June 30, 2021 as compared to $4,870,216 for the same period in 2020, representing a decrease of $1,397,944 or 29%. The decrease in research and development spending for the six months ended June 30, 2021 was primarily attributable to the reduction in expense due to the completion of the CTCL and oral mucositis trials.

General and administrative expenses were $915,280 for the three months ended June 30, 2021, as compared to $785,776 for the same period in 2020, representing an increase of $129,504 or 16%. General and administrative expenses were $1,806,720 for the six months ended June 30, 2021, as compared to $1,654,443 for the same period in 2020, representing an increase of $152,277 or 9%. The increase in general and administrative spending for the three and six month ended June 30, 2021 was primarily attributable to an increase in legal and consulting services and the arbitration against Emergent BioSolutions, Inc. and certain of its subsidiaries.  

Interest expense, net for the three months ended June 30, 2021 was $214,750 compared to interest income of $2,017 for the same period in 2020, representing an increase of $216,767 or 10747%. Interest expense, net for the six months ended June 30, 2021 was $428,255 as compared to interest income of $23,964 for the same period in 2020, representing an increase of $452,219 or 1887%. The increase in expense for the three and six

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months ended June 30, 2021 was due to the interest incurred on the convertible debt loan entered into in December 2020.  

Financial Condition

Cash and Working Capital

As of June 30, 2021, we had cash and cash equivalents of $28,979,969 as compared to $18,676,663 as of December 31, 2020, representing an increase of $10,303,306 or 55%. As of June 30, 2021, we had working capital of $25,228,135 as compared to working capital of $13,386,485 as of December 31, 2020, representing an increase of $11,841,650 or 88%. The increase in cash and working capital was primarily related to proceeds received from the sale of shares of our common stock via the At Market Issuance Sales Agreement (“B. Riley Sales Agreement”) with B. Riley Securities, Inc. in 2021 and management of our cash burn, partially offset by cash used in operations.

Based on our current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, cash available from the loan from Pontifax Medison Finance, and proceeds available from the B. Riley Sales Agreement, management believes that its current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the next twelve months from issuance of the financial statements.

Our plans with respect to our liquidity management include, but are not limited to, the following:

● We have up to $1.8 million in active government contract funding still available as of June 30, 2021 to support our associated research programs through 2022 provided the federal agencies do not elect to terminate the contracts for convenience. We plan to submit additional contract and grant applications for further support of our programs with various funding agencies;

● We have continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expect to continue to do so for the foreseeable future;

● We will continue to pursue Net Operating Loss sales in the state of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program if the program is available;

● We plan to pursue potential partnerships for pipeline programs as well as continue to explore merger and acquisition strategies; however, there can be no assurances that we can consummate such transactions;

● We have up to $10.0 million remaining available from the loan and security agreement with Pontifax Medison Finance as of May 17, 2021, which includes an immediately available $5.0 million line of credit and a $5.0 million late withdrawal loan that is contingent upon the initial filing of the NDA for CTCL;

● We have up to $2.0 million remaining from the B. Riley Sales Agreement as of August 13, 2021 under the prospectus supplement updated August 28, 2020; and

● We may seek additional capital in the private and/or public equity markets, pursue government contracts and grants as well as business development activities, to continue our operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. We are currently evaluating additional equity/debt financing opportunities on an ongoing basis and may execute them when appropriate. However, there can be no assurances that we can consummate such a transaction, or consummate a transaction at favorable pricing.

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Expenditures

Under our budget and based upon our existing product development agreements and license agreements pursuant to letters of intent and option agreements, we expect our total research and development expenditures for the next 12 months to be approximately $15.4 million before any contract or grant reimbursements, of which $14.4 million relates to the Specialized BioTherapeutics business and $1.0 million relates to the Public Health Solutions business. We anticipate contract and grant reimbursements in the next 12 months of approximately $1.3 million to offset research and development expenses in both the Specialized BioTherapeutics and the Public Health Solutions business segments.

The table below details our costs for research and development by program and amounts reimbursed for the six months ended June 30:

	2021		2020
Research & Development Expenses
RiVax® and ThermoVax® Vaccines	$	363,475	$	427,087
SGX942 (Dusquetide)		144,020		2,281,418
CiVax™		20,000		—
SGX943		851,661		—
HyBryte™ (SGX301 or synthetic hypericin)		1,852,294		1,907,390
Other		240,822		254,321
Total	$	3,472,272	$	4,870,216
Reimbursed under Government Contracts and Grants
RiVax® and ThermoVax® Vaccines	$	102,916	$	1,112,019
SGX942 (Dusquetide)		(15,000)		80,825
CiVax™		204,582		—
SGX943		34,179		—
Total		326,677		1,192,844
Grand Total	$	3,798,949	$	6,063,060

Contractual Obligations

We have licensing fee commitments of approximately $450,000 as of June 30, 2021 for several licensing agreements with entities, consultants and universities. Additionally, we have collaboration and license agreements, which upon clinical or commercialization success may require the payment of milestones of up to $7.9 million and/or royalties up to 6% of net sales of covered products, if and when achieved. However, there can be no assurance that clinical or commercialization success will occur.

We currently lease approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey pursuant to a lease that expires in to October 2022. This office space currently serves as our corporate headquarters, and both of our business segments (Specialized BioTherapeutics and Public Health Solutions), operate from this space. The rent for the remainder of the term will be approximately $11,108 per month, or $21.50 per square foot. Our office space is sufficient to satisfy our current needs.

In September 2014, we entered into an asset purchase agreement with Hy Biopharma pursuant to which we acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic hypericin product. As consideration for the assets acquired, we initially paid $275,000 in cash and issued 184,912 shares of common stock with a fair value based upon our stock price on the date of grant of $3.75 million. These amounts were charged to research and development expense during the third quarter of 2014 as the assets will be used in our research and development activities and do not have alternative future use pursuant to generally accepted accounting principles in the U.S.

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During March 2020, we filed a prospectus supplement covering the offer and sale of up to 1,956,182 shares of our common stock which were issued to Hy Biopharma. We were required to issue the shares to Hy Biopharma as payment following the achievement of a milestone under the asset purchase agreement, specifically, the Phase 3 clinical trial of HyBryte™ being successful in the treatment of CTCL. The number of shares of our common stock issued to Hy Biopharma was calculated using an effective price of $2.56 per share, based upon a formula set forth in the asset purchase agreement.

Provided the sole remaining future success-oriented milestone is attained, we will be required to make an additional payment of $5.0 million, if and when achieved to Hy Biopharma. Such payment will be payable in our common stock, not to exceed 19.9% of our outstanding stock. As of June 30, 2021, no other milestone or royalty payments have been paid or accrued.

On December 16, 2020, we entered into a $20.0 million convertible debt financing agreement with Pontifax Medison Finance (“Pontifax”), the healthcare-dedicated venture and debt fund of the Pontifax life science funds. Under the terms of the agreement with Pontifax, we have access to up to $20.0 million in convertible debt financing in three tranches, which will mature on June 15, 2025 and have an interest only period for the first two years with a rate of 8.47% on borrowed amounts and a 1% rate on amounts available but not borrowed. Upon the closing of this transaction, we borrowed the first tranche of $10.0 million, and have the option to draw the second tranche of $5.0 million at any time by December 15, 2021 and the third tranche of $5.0 million upon filing of the HyBryte™ NDA, subject to certain conditions. Interest expense incurred and paid in the three and six months ended June 30, 2020 totaled $223,636 and $444,814, respectively.

Pontifax may elect to convert the outstanding loan drawn under the first two tranches into shares of our common stock at any time prior to repayment at a conversion price of $4.10 per share. We also have the ability to force the conversion of the loan into shares of our common stock, subject to certain conditions.

In January 2020, our Board of Directors authorized an amendment to Dr. Schaber’s employment agreement to increase the number of shares of common stock from 5,000 to 500,000, issuable to Dr. Schaber immediately prior to the completion of a transaction, or series or a combination of related transactions, negotiated by our Board of Directors whereby, directly or indirectly, a majority of our capital stock or a majority of our assets are transferred from us and/or our stockholders to a third party. Dr. Schaber’s employment agreement was amended to include our obligation to issue the increased number of shares if such event occurs.

As a result of the above agreements, we have future contractual obligations as follows:

			Property and		Principal
Year	Licensing Fee		Other Leases		and Interest		Total
July 1 through December 31, 2021	$	50,000	$	68,786	$	452,186	$	570,972
2022		100,000		111,083		897,000		1,108,083
2023		100,000		—		4,769,138		4,869,138
2024		100,000		—		4,430,338		4,530,338
2025		100,000		—		2,110,566		2,210,566
Total	$	450,000	$	179,869	$	12,659,228	$	13,289,097

CARES Act Loan

In April 2020, we were advised that our principal bank, JPMorgan Chase Bank, N.A., had approved a $417,830 loan (the “Loan”) under the Paycheck Protection Program (“PPP”) pursuant to the Coronavirus Aid, Relief and Economic Security Act that was signed into law in March 2020.

As a U.S. small business, we qualified for the PPP, which allows businesses and nonprofits with fewer than 500 employees to obtain loans of up to $10.0 million to incentivize companies to maintain their workers as they manage the business disruptions caused by the COVID-19 pandemic. The PPP provides for loans for amounts

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up to 2.5 times of the average monthly payroll expenses of the qualifying business. The PPP loan proceeds may be used for eligible purposes, including payroll, benefits, rent and utilities.

The Loan had a term of two years, was unsecured, and was guaranteed by the Small Business Administration (“SBA”). The Loan bore interest at a fixed rate of 0.98% per annum, with interest and principal deferred during the eight-week or twenty-four-week period following the Loan origination date (“the loan forgiveness period”) and subsequent 10 months. Some or all of the Loan was eligible for forgiveness if at least 60% of the Loan proceeds were used by us to cover payroll costs, including benefits and if we maintained our employment and compensation within certain parameters during the loan forgiveness period and complied with other relevant conditions. We used the proceeds for purposes consistent with the PPP and met the conditions for forgiveness of the Loan.

On June 29, 2021, the SBA and JPMorgan notified us that the entire balance of this note has been forgiven. We recorded the forgiveness of the principal and accrued interest as a gain on forgiveness in other income on the consolidated statement of operations.

Contingencies

We follow subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. A liability is only recorded if we determine that it is both probable and reasonably estimable.

COVID-19

Based on the current outbreak of SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, there could be additional repercussions to our operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.

The continued global spread of COVID-19 has affected our operations but did not have a material impact on our business, operating results, financial condition or cash flows as of and for the three and six months ended June 30, 2021. In particular, the third party manufacturers of HyBryte™ have experienced certain delays due to disruptions in their normal human operations, supply chain and other related logistical matters. In part due to these delays, we have decided not to pursue a rolling NDA submission for HyBryte™ at this time, in order to provide additional supportive data for inclusion in the NDA filing.

The future impact of the outbreak is highly uncertain and cannot be predicted, and we cannot provide any assurance that the outbreak will not have a material adverse impact on our operations or future results or filings with regulatory health authorities. The extent of the impact to us, if any, will depend on future developments, including actions taken to contain the coronavirus.

Emergent BioSolutions Legal Proceedings

In July 2020, we filed a demand for arbitration against Emergent BioSolutions, Inc. (“Emergent”) and certain of its subsidiaries with the American Arbitration Association in Mercer County, New Jersey. We allege in the arbitration various breaches of contracts and warranties as well as acts of fraud. Emergent has answered that demand for arbitration denying the allegations and asserting affirmative defenses (see Part II, Item 1 – Legal Proceedings).

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We are seeking to recover damages in excess of $19.0 million from Emergent. While we intend to vigorously pursue this arbitration, we cannot offer any assurances that we will recover any damages from Emergent.

We have received invoices from Emergent related to the above matter. No accrual has been made for these invoices as we deem them invalid, and not probable of being required to pay them based on the numerous breaches cited in the pending arbitration. These invoices total approximately $331,000.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because the majority of our investments are in short-term marketable securities, in addition to the foreign exchange rate fluctuations related to our foreign currency transactions. We do not have any derivative financial instruments. Due to the nature of our short-term investments, we believe that we are not subject to any material market risk exposure.

ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the possible controls and procedures.

Our management has evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our management, including our principal executive officer and principal financial officer, has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Controls

There was no change in our internal control over financial reporting identified in connection with the evaluation of such internal controls that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

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PART II - OTHER INFORMATION.

ITEM 1 – LEGAL PROCEEDINGS

From time to time, the Company is a party to claims and legal proceedings arising in the ordinary course of business. The Company’s management evaluates the Company’s exposure to these claims and proceedings individually and in the aggregate and allocates additional monies for potential losses on such litigation if it is possible to estimate the amount of loss and if the amount of the loss is probable.

In July 2020, the Company filed a demand for arbitration against Emergent BioSolutions, Inc. (“EBS”); Emergent Product Development Gaithersburg, Inc. (“EPDG”); and Emergent Manufacturing Operations Baltimore LLC (“EMOB” and together with EBS and EPDG, “Emergent”) with the American Arbitration Association in Mercer County, New Jersey in which the Company has alleged that (a) EPDG breached the EPDG Subcontract (defined in the following paragraph), the EPDG Quality Agreement (defined in the following paragraph), an express warranty, a warranty of merchantability, and a warranty of fitness for a particular purpose, (b) EMOB breached the EMOB Quality Agreement (defined in the following paragraph); (c) EPDG was unjustly enriched; (d) EPDG and EMOB were negligent in the performance of their work; and (e) EBS fraudulently induced the Company into entering into the contracts with EPDG and EMOB. Emergent has answered that demand for arbitration denying the allegations and asserting affirmative defenses.

After several months of negotiations and based on representations Emergent made related to its capabilities in developing upstream and downstream processes for vaccines and its designation as a Center for Innovation in Advanced Development and Manufacturing, in May 2015, the Company entered into a subcontract (the “EPDG Subcontract”) with EPDG, pursuant to which EPDG agreed to manufacture, and provide to the Company, RiVax^® bulk drug substance (“BDS”). In March 2017, the Company entered into a quality agreement (the “EPDG Quality Agreement”) with EPDG for the purpose of defining and allocating the quality-related responsibilities between the Company and EPDG with respect to the production of the RiVax^® BDS under the EPDG Subcontract.

After nearly three years of EPDG failing to meet the scope of work set forth in the EPDG Subcontract, Emergent recommended that both development and manufacturing work under the EPDG Subcontract be transferred to EMOB. In July 2018, the Company entered into a quality agreement (the “EMOB Quality Agreement”) with EMOB, which agreement allocated various defined responsibilities between the Company and EMOB with respect to the manufacture, supply, and testing of the RiVax^® BDS. Under the EMOB Quality Agreement, EMOB assumed sole responsibility for, inter alia, (i) employee training; (ii) providing adequate and qualified personnel; (iii) notifying the Company of out-of-specification results within two (2) business days of identification of the out of-specification results; (iv) performing testing using agreed-to testing procedures, test methods, specifications, and required compendia requirements; (v) ensuring that EMOB-generated data was accurate, controlled and safe from manipulation or loss; (vi) ensuring that the procedures, the state of automation and/or management controls were in place to assure data integrity; (vii) apprising the Company of any significant changes to analytical methodology for intermediaries, in-process or final product; and (viii) assuring that samples were stored in appropriate, continuously monitored conditions.

In January 2020, EMOB informed the Company (a) of the existence of a questionable test result that could result in a determination that the RiVax^® BDS manufactured, tested and released by EMOB was out-of-specification and should never have been released by Emergent, and (b) that the validity of “initial release” test results for such BDS was faulty because Emergent used an improper test method. The Company immediately suspended the Phase 1c trial to evaluate RiVax^® in healthy adults, ending both further enrollment and further dosing. Emergent conducted an internal review of this deviation and found multiple internal failures including an “Inadequate analytical method transfer process,” an “Inability to comply with standard operating procedures around method transfer and data review,” and an “Inability to comply with test method procedures.” The Company quickly initiated a “for-cause” audit of the Emergent facility and confirmed the failures Emergent identified and admitted to in its own internal investigation.

50

The Company is seeking to recover damages in excess of $19.0 million from Emergent. While the Company intends to vigorously pursue this arbitration, the Company cannot offer any assurances that it will recover any damages from Emergent.

ITEM 1A – RISK FACTORS

Our business faces significant risks. These risks include those disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. If any of the events or circumstances described in the referenced risks actually occur, our business, financial condition or results of operations could be materially adversely affected and such events or circumstances could cause our actual results to differ materially from the results contemplated by the “forward-looking” statements contained in this report. These risks should be read in conjunction with the other information set forth in this Quarterly Report as well as in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in our periodic reports on Form 10-Q and Form 8-K. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business, financial condition and results of operations. We do not undertake to update any of the “forward-looking” statements or to announce the results of any revisions to these “forward-looking” statements, except as required by law.

51

ITEM 6 – EXHIBITS

EXHIBIT NO.	DESCRIPTION
31.1	Certification of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of 2002).
31.2	Certification of Chief Financial Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of 2002).
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Schema
101.CAL	Inline XBRL Taxonomy Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Definition Linkbase
101.LAB	Inline XBRL Taxonomy Label Linkbase
101.PRE	Inline XBRL Taxonomy Presentation Linkbase
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

52

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SOLIGENIX, INC.
August 13, 2021	By	/s/ Christopher J. Schaber
		Christopher J. Schaber, PhD
		President and Chief Executive Officer
		(Principal Executive Officer)

August 13, 2021	By	/s/ Jonathan Guarino
		Jonathan Guarino
		Chief Financial Officer, Senior Vice President,
		and Corporate Secretary
		(Principal Financial and Accounting Officer)

53

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, Christopher J. Schaber, Ph.D., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Soligenix, Inc. for the fiscal quarter ended June 30, 2021;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 13, 2021	/s/ Christopher J. Schaber
	Christopher J. Schaber, Ph.D.
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, Jonathan Guarino, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Soligenix, Inc. for the fiscal quarter ended June 30, 2021;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 13, 2021	/s/ Jonathan Guarino
	Jonathan Guarino
	Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Form 10-Q of Soligenix, Inc. (the “Company”) for the fiscal quarter ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 13, 2021	/s/ Christopher J. Schaber
	Christopher J. Schaber, Ph.D.
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Form 10-Q of Soligenix, Inc. (the “Company”) for the fiscal quarter ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 13, 2021	/s/ Jonathan Guarino
	Jonathan Guarino
	Senior Vice President and Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Aug. 11, 2021
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	Jun. 30, 2021
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-16929
Entity Registrant Name	SOLIGENIX, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-1505029
Entity Address, Address Line One	29 EMMONS DRIVE, SUITE B-10
Entity Address, City or Town	PRINCETON,
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08540
City Area Code	609
Local Phone Number	538-8200
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0000812796
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Common Stock, Shares Outstanding		40,103,760
Amendment Flag	false
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $.001 per share
Trading Symbol	SNGX
Security Exchange Name	NASDAQ
Purchase warrants
Document Information [Line Items]
Title of 12(b) Security	Common Stock Purchase Warrants
Trading Symbol	SNGXW
Security Exchange Name	NASDAQ

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 28,979,969	$ 18,676,663
Contracts and grants receivable	117,680	203,774
Research and development incentives receivable	106,598	361,096
Prepaid expenses and other current assets	148,594	225,473
Total current assets	29,352,841	19,467,006
Security deposit	22,777	22,777
Office furniture and equipment, net of accumulated depreciation of $161,037 and $154,769	17,242	23,510
Deferred issuance cost	5,796	53,523
Right-of-use lease assets	167,608	228,027
Research and development incentive receivable	28,525	73,142
Other assets	15,500	23,250
Total assets	29,610,289	19,891,235
Current liabilities:
Accounts payable	1,482,359	2,129,844
Accrued expenses	2,461,630	2,638,308
Accrued compensation	67,053	875,096
Paycheck Protection Program loan		324,979
Lease liabilities - current	113,664	112,294
Total current liabilities	4,124,706	6,080,521
Non-current liabilities:
Convertible debt, net of debt discount of $164,787 and $140,261	9,835,213	9,859,739
Paycheck Protection Program loan, net of current		92,851
Lease liabilities, net of current	54,180	116,296
Total liabilities	14,014,099	16,149,407
Commitments and contingencies
Shareholders' equity:
Preferred stock, 350,000 shares authorized, none issued or outstanding
Common stock, $.001 par value; 75,000,000 shares authorized; 40,078,760 shares and 30,643,656 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	40,079	30,644
Additional paid-in capital	213,061,849	196,949,655
Accumulated other comprehensive loss	(32,058)	(24,337)
Accumulated deficit	(197,473,680)	(193,214,134)
Total shareholders' equity	15,596,190	3,741,828
Total liabilities and shareholders' equity	$ 29,610,289	$ 19,891,235

XML

Consolidated Balance Sheets (Parentheticals) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Consolidated Balance Sheets
Accumulated depreciation	$ 161,037	$ 154,769
Debt discount, noncurrent	$ 164,787	$ 140,261
Preferred stock, shares authorized	350,000	350,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (per share)	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	40,078,760	30,643,656
Common stock, shares outstanding	40,078,760	30,643,656

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues:
Contract revenue		$ 292,461	$ 33,351	$ 1,137,647
Revenues	$ 214,824	505,288	362,417	1,429,842
Cost of revenues	(204,317)	(363,339)	(326,677)	(1,192,844)
Gross profit	10,507	141,949	35,740	236,998
Operating expenses:
Research and development	2,104,872	2,170,045	3,472,272	4,870,216
General and administrative	915,280	785,776	1,806,720	1,654,443
Research and development expense - milesetone				5,000,000
Total operating expenses	3,020,152	2,955,821	5,278,992	11,524,659
Loss from operations	(3,009,645)	(2,813,872)	(5,243,252)	(11,287,661)
Gain on forgiveness of PPP loan	421,584		421,584
Foreign currency transaction gain/(loss)	17,330	(3,583)	44,583	(26,818)
Interest (expense)/income	(214,750)	2,017	(428,255)	23,964
Research and development incentives	23,671	38,675	81,052	95,525
Net loss before income taxes	(2,761,810)	(2,776,763)	(5,124,288)	(11,194,990)
Income tax benefit	864,742		864,742	836,893
Net loss applicable to common stockholders	$ (1,897,068)	$ (2,776,763)	$ (4,259,546)	$ (10,358,097)
Basic and diluted net loss per share (in Dollars per share)	$ (0.05)	$ (0.10)	$ (0.11)	$ (0.41)
Basic and diluted weighted average common shares outstanding (in Shares)	40,074,275	26,901,781	38,455,210	25,153,350
Grant
Revenues:
Revenues	$ 214,824	$ 212,827	$ 329,066	$ 292,195

XML

Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Consolidated Statements of Comprehensive Loss
Net loss	$ (1,897,068)	$ (2,776,763)	$ (4,259,546)	$ (10,358,097)
Other comprehensive loss:
Foreign currency translation adjustments	3,617	(8,184)	(7,721)	8,059
Comprehensive loss	$ (1,893,451)	$ (2,784,947)	$ (4,267,267)	$ (10,350,038)

XML

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Acculated other comprehensive loss	Accumulated Deficit	Total
Balance at Dec. 31, 2019	$ 21,753	$ 177,006,004	$ (45,010)	$ (175,525,612)	$ 1,457,135
Balance (in shares) at Dec. 31, 2019	21,753,124
Issuance of common stock pursuant to FBR at Market Issuance	$ 4,545	9,455,404			9,459,949
Issuance of common stock pursuant to FBR at Market Issuance (in shares)	4,545,116
Issuance costs associated with FBR at Market Issuance Sales Agreement		(425,524)			(425,524)
Issuance of common stock for milestone	$ 1,956	4,998,044			5,000,000
Issuance of common stock for milestone (in shares)	1,956,182
Issuance of common stock to vendor	$ 30	58,970			59,000
Issuance of common stock to vendor (in shares)	30,000
Exercise of common stock options	$ 2				2
Options exercised (in shares)	2,189
Excerise of warrants	$ 305	685,079			685,384
Exercise of warrants (in shares)	304,821
Share-based compensation expense		144,694			144,694
Foreign currency translation adjustment			8,059		8,059
Net loss				(10,358,097)	(10,358,097)
Balance at Jun. 30, 2020	$ 28,591	191,922,671	(36,951)	(185,883,709)	6,030,602
Balance (in Shares) at Jun. 30, 2020	28,591,432
Balance at Mar. 31, 2020	$ 25,778	186,624,561	(28,767)	(183,106,946)	3,514,626
Balance (in shares) at Mar. 31, 2020	25,778,431
Issuance of common stock pursuant to FBR at Market Issuance	$ 2,813	5,467,910			5,470,723
Issuance of common stock pursuant to FBR at Market Issuance (in shares)	2,813,001
Issuance costs associated with FBR at Market Issuance Sales Agreement		(250,803)			(250,803)
Share-based compensation expense		81,003			81,003
Foreign currency translation adjustment			(8,184)		(8,184)
Net loss				(2,776,763)	(2,776,763)
Balance at Jun. 30, 2020	$ 28,591	191,922,671	(36,951)	(185,883,709)	6,030,602
Balance (in Shares) at Jun. 30, 2020	28,591,432
Balance at Dec. 31, 2020	$ 30,644	196,949,655	(24,337)	(193,214,134)	3,741,828
Balance (in shares) at Dec. 31, 2020	30,643,656
Issuance of common stock pursuant to FBR at Market Issuance	$ 9,435	16,480,894			16,490,329
Issuance of common stock pursuant to FBR at Market Issuance (in shares)	9,435,091
Issuance costs associated with FBR at Market Issuance Sales Agreement		(544,177)			(544,177)
Excerise of warrants		51			51
Exercise of warrants (in shares)	13
Share-based compensation expense		175,426			175,426
Foreign currency translation adjustment			(7,721)		(7,721)
Net loss				(4,259,546)	(4,259,546)
Balance at Jun. 30, 2021	$ 40,079	213,061,849	(32,058)	(197,473,680)	15,596,190
Balance (in Shares) at Jun. 30, 2021	40,078,760
Balance at Mar. 31, 2021	$ 40,020	212,890,844	(35,675)	(195,576,612)	17,318,577
Balance (in shares) at Mar. 31, 2021	40,020,461
Issuance of common stock pursuant to FBR at Market Issuance	$ 59	94,664			94,723
Issuance of common stock pursuant to FBR at Market Issuance (in shares)	58,299
Issuance costs associated with FBR at Market Issuance Sales Agreement		(4,280)			(4,280)
Share-based compensation expense		80,621			80,621
Foreign currency translation adjustment			3,617		3,617
Net loss				(1,897,068)	(1,897,068)
Balance at Jun. 30, 2021	$ 40,079	$ 213,061,849	$ (32,058)	$ (197,473,680)	$ 15,596,190
Balance (in Shares) at Jun. 30, 2021	40,078,760

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating activities:
Net loss	$ (4,259,546)	$ (10,358,097)
Adjustments to reconcile net loss to cash used in operating activities:
Amortization and depreciation	17,739	35,448
Non-cash lease expense	56,698	66,298
Share-based compensation	175,426	144,694
Issuance of common stock for milestone		5,000,000
Issuance of common stock for services		59,000
Amortization of deferred issuance costs associated with convertible debt	20,986
Gain on forgiveness of PPP loan	(421,584)
Change in operating assets and liabilities:
Contracts and grants receivable	86,094	684,048
Prepaid expenses and other current assets	76,879	434,877
Research and development incentives receivable	306,651	19,754
Operating lease liability	(56,698)	(67,004)
Accounts payable and accrued expenses	(838,749)	(136,035)
Accrued compensation	(808,043)	(221,513)
Total adjustments	(1,384,601)	6,019,567
Net cash used in operating activities	(5,644,147)	(4,338,530)
Investing activities:
Purchases of office furniture and equipment		(7,147)
Net cash used in investing activities		(7,147)
Financing activities:
Proceeds from issuance of common stock pursuant to FBR At Market Issuance Sales Agreement	16,490,329	9,459,949
Costs associated with FBR At Market Issuance Sales Agreement	(496,450)	(425,915)
Proceeds from the exercise of warrants	51	685,384
Costs associated with issuance of convertible debt	(45,512)
Proceeds from paycheck protection program		417,830
Principal repayment - financing lease	(4,048)	(3,664)
Net cash provided by financing activities	15,944,370	10,133,584
Effect of exchange rate on cash and cash equivalents	3,083	(40,310)
Net increase in cash and cash equivalents	10,303,306	5,747,597
Cash and cash equivalents at beginning of period	18,676,663	5,420,708
Cash and cash equivalents at end of period	28,979,969	11,168,305
Supplemental information:
Cash paid for state income taxes	7,382
Cash paid for interest	444,814
Cash paid for lease liabilities:
Operating lease	66,650	71,298
Financing lease	4,272	4,272
Non-cash activities:
Deferred issuance cost in accounts payable		85,657
Deferred issuance cost reclassified to additional-paid-in capital	$ 47,727	85,266
Issuance of stock options, cash exercise price received in December 2019		$ 1,882

XML

Nature of Business

6 Months Ended

Jun. 30, 2021

Nature of Business

Nature of Business

Note 1. Nature of Business

Basis of Presentation

Soligenix, Inc. (the “Company”) is a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need. The Company maintains two active business segments: Specialized BioTherapeutics and Public Health Solutions.

The Company’s Specialized BioTherapeutics business segment is developing and moving towards commercialization of HyBryte™ (a proposed proprietary name of SGX301 or synthetic hypericin), a novel photodynamic therapy utilizing topical synthetic hypericin activated with safe visible light for the treatment of cutaneous T-cell lymphoma (“CTCL”). With a successful Phase 3 study complete, regulatory approval is being sought and commercialization activities for this product candidate are being advanced initially in the United States (“U.S.”). Development programs in this business segment also include the Company’s first-in-class innate defense regulator technology, dusquetide (SGX942) for the treatment of inflammatory diseases, including oral mucositis in head and neck cancer, and proprietary formulations of oral beclomethasone 17,21-dipropionate (“BDP”) for the prevention/treatment of gastrointestinal disorders characterized by severe inflammation, including pediatric Crohn’s disease (SGX203) and acute radiation enteritis (SGX201).

The Company’s Public Health Solutions business segment includes active development programs for RiVax^®, its ricin toxin vaccine candidate and SGX943, a therapeutic candidate for antibiotic resistant and emerging infectious disease, and vaccine programs, including a program targeting filoviruses (such as Marburg and Ebola) and a program developing CiVax™, its vaccine candidate for the prevention of COVID-19 (caused by SARS-CoV-2). The development of the vaccine programs is currently supported by the heat stabilization technology, known as ThermoVax^®. To date, this business segment has been supported with government grant and contract funding from the National Institute of Allergy and Infectious Diseases (“NIAID”), the Biomedical Advanced Research and Development Authority and the Defense Threat Reduction Agency (“DTRA”).

The Company generates revenues under government grants primarily from the National Institutes of Health (“NIH”) and government contracts from NIAID. The Company has a subcontract of approximately $700,000 from a NIAID grant over five years for its thermostabilization technology, a DTRA subcontract of approximately $600,000 over three years for SGX943 and a subcontract of approximately $1.5 million from a NIAID grant over two years for development of CiVax™. The Company will continue to apply for additional government funding.

The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, development of new technological innovations, dependence on key personnel, protections of proprietary technology, compliance with the U.S. Food and Drug Administration (the “FDA”) regulations, and other regulatory authorities, litigation, and product liability.

Results for the three and six months ended June 30, 2021 are not necessarily indicative of results that may be expected for the full year.

Liquidity

In accordance with Accounting Standards Codification 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of June 30, 2021, the Company had an accumulated deficit of $197,473,680. During the six months ended June 30, 2021, the Company incurred a net loss of $4,259,546 and used $5,644,147 of cash in operating activities. The Company expects to continue to generate losses in the foreseeable future. The Company’s liquidity needs will be determined largely by the budgeted operational expenditures incurred in regards to the progression of its product candidates. The Company’s plans to meet its liquidity needs primarily include its ability to control the timing and spending on its research and development programs and raising additional funds through potential partnership and/or financings. Based on the Company’s approved operating budget, current rate of cash outflows, cash on hand, proceeds from government contract and grant programs, cash available from the loan from Pontifax Medison Finance, proceeds received from the sale of shares of the Company’s common stock via the At Market Issuance Sales Agreement (“B. Riley Sales Agreement”) with B. Riley Securities, Inc., and management of the Company’s cash burn, management believes that its current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures for at least the next 12 months from issuance of the financial statements.

As of June 30, 2021, the Company had cash and cash equivalents of $28,979,969 as compared to $18,676,663 as of December 31, 2020, representing an increase of $10,303,306 or 55%. As of June 30, 2021, the Company had working capital of $25,228,135 as compared to working capital of $13,386,485 as of December 31, 2020, representing an increase of $11,841,650 or 88%. The increase in cash and working capital was primarily related to proceeds received from the utilization of the B. Riley Sales Agreement, partially offset by cash used in operating activities.

Management’s business strategy can be outlined as follows:

● Following positive primary endpoint results for the Phase 3 clinical trial of HyBryte™ as well as further statistically significant improvement in response rates with longer treatment (18 weeks compared to 12 and 6 weeks of treatment), pursue New Drug Application (“NDA”) filing and commercialization in the U.S. while continuing to explore ex-U.S. partnership.

● Continue to analyze the full dataset from the Phase 3 clinical trial of SGX942, including data from long-term (12 month) follow-up, to better understand why the study did not achieve the statistically significant benefit expected, despite demonstrating clinically meaningful reductions in oral mucositis consistent with the previous Phase 2 study. Any clarity gained from further analysis, especially with respect to specific subsets of patients that may benefit from SGX942 therapy, will be communicated to and discussed with the U.S. and/or European regulatory health authorities.

● Continue development of RiVax^® in combination with the Company’s ThermoVax^® technology to develop a new heat stable vaccine in biodefense with NIAID funding support.

● Continue to apply for and secure additional government funding for each of the Company’s Specialized BioTherapeutics and Public Health Solutions programs through grants, contracts and/or procurements.

● Pursue business development opportunities for the Company’s pipeline programs, as well as explore merger/acquisition strategies.

● Acquire or in-license new clinical-stage compounds for development, as well as evaluate new indications with existing pipeline compounds for development.

The Company’s plans with respect to its liquidity management include, but are not limited to, the following:

● The Company has up to $1.8 million in active government contract and grant funding still available as of June 30, 2021 to support its associated research programs through 2022, provided the federal agencies do not elect to terminate the contracts or grants for convenience. The Company plans to submit additional contract and grant applications for further support of its programs with various funding agencies;

● The Company has continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expects to continue to do so for the foreseeable future;

● The Company will continue to pursue Net Operating Loss (“NOL”) sales in the state of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program if available;

● The Company plans to pursue potential partnerships for pipeline programs as well as continue to explore merger and acquisition strategies. However, there can be no assurances that the Company can consummate such transactions;

● The Company has up to $10.0 million remaining available from the loan and security agreement with Pontifax Medison Finance as of August 13, 2021, which includes an immediately available $5 million line of credit and a $5 million late withdrawal loan that is contingent upon the initial filing of the NDA for CTCL;

● The Company has up to $2.0 million remaining from the B. Riley Sales Agreement as of August 13, 2021 under the prospectus supplement updated August 28, 2020; and

● The Company may seek additional capital in the private and/or public equity markets, to continue its operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. The Company is evaluating additional equity/debt financing opportunities on an ongoing basis and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated as a result of consolidation.

Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. The Company divides its operations into two operating segments: Specialized BioTherapeutics and Public Health Solutions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Contracts and Grants Receivable

Contracts and grants receivable consist of amounts due from various grants from the NIH and contracts from NIAID, an institute of NIH, for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the respective governmental agencies in the month subsequent to period end and collected shortly thereafter. Accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.

Website Development Costs

In February 2019, Altamont Pharmaceutical Holdings, LLC, a company which owned 5% or more of the Company’s shares of common stock at the time, signed a service agreement with a third-party vendor to re-develop the Company’s website. Upon completion of the project at the end of June 2019, the Company capitalized the related website development costs of $46,500 in accordance with FASB Codification ASC 350-50 “Accounting for Web Site Development Costs.” During the quarter ended September 30, 2019, the Company began amortizing the website development costs on a straight-line basis over three years, the estimated useful life of the website. The Company will also review its capitalized website development costs periodically for impairment. Website amortization expense for the three months ended June 30, 2021 and 2020 was $3,875 and $3,875, respectively, and accumulated amortization was $31,000 and $15,502, respectively, as of June 30, 2021 and 2020. Website amortization expense for the six months ended June 30, 2021 and 2020 was $7,750 and $7,752, respectively.  Website development costs are included in other assets in the accompanying consolidated balance sheets.

Impairment of Long-Lived Assets

Office furniture and equipment, website development costs and intangible assets with finite lives are evaluated and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.

The Company did not record any impairment of long-lived assets for the three or six months ended June 30, 2021 or 2020.

Fair Value of Financial Instruments

FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on June 30, 2021. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

● Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

● Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

● Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, contracts and grants receivable, research and development incentives receivable, accounts payable, accrued expenses, and accrued compensation approximate their fair value based on the short-term nature of these instruments.

The carrying amounts reported in the consolidated balance sheets for convertible debt and the loan under the Paycheck Protection Program approximate their fair value based on their maturity dates.

Revenue Recognition

The Company’s revenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs reimbursable internal expenses that are related to the government contracts and grants.

Research and Development Costs

Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocation of various corporate costs.

Share-Based Compensation

Stock options are issued with an exercise price equal to the market price on the date of grant. Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position, the options will expire within three months, unless otherwise extended by the Board.

From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for services performed under the Company’s 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of stock options, restricted stock, deferred stock and unrestricted stock to the Company’s employees and non-employees (including consultants). The shares issued under the 2015 Plan are registered on Form S-8 (SEC File No. 333-208515). However, as shares of common stock are not covered by a reoffer prospectus, the certificates reflecting such shares reflect a Securities Act of 1933, as amended restrictive legend. Stock compensation expense for equity-classified awards to nonemployees is measured on the date of grant and is recognized when the services are performed.

The fair value of options issued during the six months ended June 30, 2021 and 2020 was estimated using the Black-Scholes option-pricing model and the following assumptions:

● a dividend yield of 0%;

● an expected life of 4 years;

● volatility of 87% for 2021 and 77% - 79% for 2020; and

● risk free interest rates of 0.27% - 0.60% for 2021 and 1.38% - 1.66% for 2020.

The fair value of each option grant made during the six months ended June 30, 2021 and 2020 was estimated on the date of each grant using the Black-Scholes option pricing model and recognized as share-based compensation expense ratably over the option vesting periods, which approximates the service period.

Foreign Currency Transactions and Translation

In 2018, the Company changed the status of a wholly owned subsidiary in the United Kingdom (“UK”) from inactive to active and incurred expenditures in multiple currencies including the U.S. dollar, the British Pound and the Euro to fund its clinical trial operations in the UK and select countries in Europe. In accordance with FASB ASC 830 Foreign Currency Matters, the UK subsidiary expresses its U.S. dollar and Euro denominated transactions in its functional currency, the British Pound, with related transaction gains or losses included in net income. On a quarterly basis, the financial statements of the UK subsidiary are translated into U.S. dollars and consolidated into the Company’s financials, with related translation adjustments reported as a cumulative translation adjustment (“CTA”), which is a component of accumulated other comprehensive loss. During the three months ended June 30, 2021 and 2020, the Company recognized a foreign currency transaction gain of $17,330 and a foreign currency transaction loss of $3,583, respectively, in the accompanying consolidated statements of operations.  During the six months ended June 30, 2021 and 2020, the Company recognized a foreign currency transaction gain of $44,583 and a foreign currency transaction loss of $26,818, respectively, in the accompanying consolidated statements of operations.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence is considered, including the Company’s current and past performance, the market environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognized an income tax benefit of $864,742 and $836,893 from the sale of New Jersey NOL carryforwards during the six months ended June 30, 2021 and 2020, respectively. The Company recognized accrued interest and penalties associated with uncertain tax positions, if any as part of the income tax provision. There were no tax related interest and penalties recorded for the six months ended June 30, 2021 or 2020. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax positions at June 30, 2021 or December 31, 2020.

Research and Development Incentive Income and Receivable

The Company recognizes other income from UK research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The small or medium sized enterprise (“SME”) research and development tax relief program supports companies that seek to research and develop an advance in their field and is governed through legislative law by HM Revenue & Customs as long as specific eligibility criteria are met.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the SME research and development tax relief program described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. As a result, amounts realized under the SME research and development tax relief program are recorded as a component of other income.

The following table shows the change in the UK research and development incentives receivable from December 31, 2020 to June 30, 2021:

	Current		Long-Term		Total
Balance at December 31, 2020	$	361,096	$	73,142	$	434,238
UK research and development incentives, transfer		73,142		(73,142)		—
UK research and development incentives		—		29,159		29,159
Additional 2019 incentive earned		51,893		—		51,893
UK research and development incentives cash receipt		(383,933)		—		(383,933)
Foreign currency translation		4,400		(634)		3,766
Balance at June 30, 2021	$	106,598	$	28,525	$	135,123

Loss Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing loss applicable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the entity. Since there is a significant number of options and warrants outstanding, fluctuations in the actual market price can have a variety of results for each period presented.

The following table summarizes potentially dilutive adjustments to the number of common shares which were excluded from the diluted calculation because their effect would be anti-dilutive due to the losses in each period:

	As of June 30,
	2021	2020
Common stock purchase warrants	5,731,464	5,886,817
Stock options	1,939,386	1,499,580
Total	7,670,850	7,386,397

The weighted average exercise price of the Company’s warrants and stock options outstanding at June 30, 2021 were $2.96 and $2.75 per share, respectively, and at June 30, 2020 were $2.92 and $3.20 per share, respectively.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions such as the fair value of warrants and stock options and to accrue for clinical trials in process that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and presentation.

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Leases

6 Months Ended

Jun. 30, 2021

Leases

Leases

Note 3. Leases

The Company classifies a lease for its office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey and a lease for a copy machine in the office as an operating lease and a financing lease, respectively, and recorded related right-of-use lease assets and lease liabilities accordingly. As of June 30, 2021 and December 31, 2020, the Company’s consolidated balance sheets included a right-of-use lease asset of $165,747 and $222,445 for the office space and $1,861 and $5,582 for the copy machine, respectively. Lease liabilities in the Company’s consolidated balance sheets as of June 30, 2021 and December 31, 2020 included corresponding lease liabilities of $165,743 and $222,441 for the office space and $2,101 and $6,149 for the copy machine, respectively.

The following represents a reconciliation of contractual lease cash flows to the right-of-use lease assets and liabilities recognized in the financial statements:

	Operating		Financing
	Lease		Lease
Right-of-use lease asset:
Right-of-use lease asset, January 1,2021	$	222,445	$	5,582
Reduction/amortization		(56,698)		(3,721)
Right of use lease asset, June 30, 2021	$	165,747	$	1,861
Lease liability:
Lease liability, January 1, 2021	$	222,441	$	6,149
Repayments		(56,698)		(4,048)
Lease liability, June 30, 2021	$	165,743	$	2,101
Lease expense for the six months ended June 30, 2021:
Lease expense	$	66,650	$	—
Amortization expense		—		3,721
Interest expense		—		224
Total	$	66,650	$	3,945
Contractual cash payments for the remaining lease term as of June 30, 2021:
2021	$	66,650	$	2,136
2022		111,083		—
Total	$	177,733	$	2,136
Remaining lease term (months) as of June 30, 2021		16		3

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Accrued Expenses

6 Months Ended

Jun. 30, 2021

Accrued Expenses

Accrued Expenses

Note 4. Accrued Expenses

The following is a summary of the Company’s accrued expenses:

	June 30,		December 31,
	2021		2020
Clinical trial expenses	$	2,442,105	$	2,510,111
Other		19,525		128,197
Total	$	2,461,630	$	2,638,308

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Debt

6 Months Ended

Jun. 30, 2021

Debt

Debt

Note 5. Debt

In December 2020, the Company entered into a $20.0 million convertible debt financing agreement with Pontifax Medison Debt Financing (“Pontifax”), the healthcare-dedicated venture and debt fund of the Pontifax life science funds. Under the terms of the agreement with Pontifax, the Company will have access to up to $20.0 million in convertible debt financing in three tranches, which will mature on June 15, 2025 and have an interest only period for the first two years with an interest rate of 8.47% on borrowed amounts and an interest rate of 1% on amounts available but not borrowed as an unused line of credit fee. The agreement is secured by a lien covering substantially all of the Company’s assets, other than intellectual property. The agreement contains customary representations, warranties and covenants, including covenants by the Company limiting additional indebtedness, liens, including on intellectual property, guaranties, mergers and consolidations, substantial asset sales, investments and loans, certain corporate changes, transactions with affiliates and fundamental changes. Upon the closing of this transaction, the Company accessed the first tranche of $10.0 million, and has the option to draw the second tranche of $5.0 million at any time by December 15, 2021 and the third tranche of $5.0 million upon filing of the HyBryte™ NDA, subject to certain conditions. Interest expense

incurred and paid for the three and six month ended June 30, 2021 was $223,636 and $444,814, respectively. The Company amortized $10,831 and $20,986 of issuance costs during the three and six month period ended June 30, 2021, respectively. Net deferred issuance costs of $164,787 has been recorded as a reduction of the carrying value of the $10.0 million convertible debt borrowed as of June 30, 2021.

Pontifax may elect to convert the outstanding loan drawn into shares of the Company’s common stock at any time prior to repayment at a conversion price of $4.10 per share. The Company also has the ability to force the conversion of the loan into shares of the Company’s common stock at the same conversion price, subject to certain conditions.

Principal and interest payments due, assuming no conversion or additional borrowings over the next five years is as follows:

Year	Principal		Interest		Total
July 2021 to December 2021	$	—	$	452,186	$	452,186
2022		—		897,000		897,000
2023		4,000,000		769,138		4,769,138
2024		4,000,000		430,338		4,430,338
2025		2,000,000		110,566		2,110,566
Total	$	10,000,000	$	2,659,228	$	12,659,228

CARES Act Loan

In April 2020, the Company was advised that its principal bank, JPMorgan Chase Bank, N.A., had approved a $417,830 loan (the “Loan”) under the Paycheck Protection Program (“PPP”) pursuant to the Coronavirus Aid, Relief and Economic Security Act that was signed into law in March 2020.

As a U.S. small business, the Company qualified for the PPP, which allows businesses and nonprofits with fewer than 500 employees to obtain loans of up to $10 million to incentivize companies to maintain their workers as they manage the business disruptions caused by the COVID-19 pandemic. The PPP provides for loans for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The PPP loan proceeds may be used for eligible purposes, including payroll, benefits, rent and utilities.

The Loan had a term of two years, was unsecured, and was guaranteed by the Small Business Administration (“SBA”). The Loan bore interest at a fixed rate of 0.98% per annum, with interest and principal deferred during the eight-week or twenty-four-week period following the Loan origination date (“the loan forgiveness period”) and subsequent 10 months. Some or all of the Loan was eligible for forgiveness if at least 60% of the Loan proceeds were used by the Company to cover payroll costs, including benefits and if the Company maintained its employment and compensation within certain parameters during the loan forgiveness period and complied with other relevant conditions. The Company used the proceeds for purposes consistent with the PPP and met the conditions for forgiveness of the Loan.

On June 29, 2021, the SBA and JPMorgan notified the Company that the entire balance of this note has been forgiven. The Company recorded the forgiveness of the principal and accrued interest of $421,584 as a gain on forgiveness in other income on the consolidated statement of operations.

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Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes

Income Taxes

Note 6. Income Taxes

The Company had gross NOLs at December 31, 2020 of approximately $114 million for federal tax purposes, approximately $20 million for state tax purposes and approximately $1.2 million for foreign tax purposes. Federal losses generated in 2018 or later will carry forward indefinitely. In addition, the Company has approximately $8.2 million of various tax credits which expire from 2021 to 2037. The Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities. However, these NOLs are subject to various limitations under Internal Revenue Code (“IRC”) Section 382. IRC Section 382 limits the use of NOLs

to the extent there has been an ownership change of more than 50 percentage points. In addition, the NOL carryforwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC Section 382 analysis, it is likely that the utilization of the NOLs may be substantially limited.

The Company and one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions. During 2021 and 2020, in accordance with the State of New Jersey’s Technology Business Tax Certificate Program, which allowed certain high technology and biotechnology companies to sell unused NOL carryforwards to other New Jersey-based corporate taxpayers, the Company sold New Jersey NOL carryforwards, resulting in the recognition of $864,742 and $836,893 of income tax benefit, net of transaction costs, during the six months ended June 30, 2021 and 2020, respectively. The Company has not yet sold its 2020 New Jersey NOLs but may be able to do so in the future. There can be no assurance as to the continuation or magnitude of this program in the future.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2021

Shareholders' Equity

Shareholders' Equity

Note 7. Shareholders’ Equity

Preferred Stock

The Company has 350,000 shares of preferred stock authorized, none of which are issued or outstanding.

Common Stock

The following items represent transactions in the Company’s common stock for the six months ended June 30, 2021:

● During the six months ended June 30, 2021, the Company issued 13 shares of common stock as a result of a warrant exercise. The weighted average exercise price per warrant was $3.95.

● During the six months ended June 30, 2021, the Company issued 9,435,091 shares of common stock pursuant to the B. Riley Sales Agreement at a weighted average price of $1.75 per share.

The issuances of the Company’s common stock (a) as a result of the warrant exercise described above was registered on a Registration Statement on Form S-1, and (b) pursuant to the B. Riley Sales Agreement described above were registered on a Registration Statement on Form S-3.

B. Riley At Market Issuance Sales Agreement

In August 2017, the Company entered into the B. Riley Sales Agreement to sell shares of the Company’s common stock from time to time, through an “at-the-market” equity offering program under which B. Riley acts as sales agent. Under the B. Riley Sales Agreement, the Company sets the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales may be requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The B. Riley Sales Agreement provides that B. Riley is entitled to compensation for its services in an amount equal to 3% of the gross proceeds from the sale of shares sold under the B. Riley Sale Agreement. The Company has no obligation to sell any shares under the B. Riley Sales Agreement, and may suspend solicitation and offers under the B. Riley Sales Agreement at any time.

The Company’s shelf registration statement on Form S-3 (File No. 333- 217738) filed on May 5, 2017 (the “May 2017 Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) expired on August 10, 2020, but was available to be utilized for a period up to six months or until a new shelf registration statement was declared effective, whichever occurred first. All sales under the B. Riley Sales Agreement from August 11, 2017 through August 10, 2020 were made pursuant to the May 2017 Registration Statement.

All sales of common stock made pursuant to the B. Riley Sales Agreement since the expiration of the May 2017 Registration Statement have been, and future sales will be, made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333- 239928) filed on July 17, 2020 (the “July 2020 Registration Statement”) with the SEC, and any amendments thereto, the base prospectus filed as part of such registration statement, and any prospectus supplements. The July 2020 Registration Statement was declared effective on August 28, 2020.

On August 28, 2020, the Company filed a prospectus supplement to the B. Riley Sales Agreement to offer and sell shares of Company common stock having an aggregate offering price of up to $20.0 million under the July 2020 Registration Statement. As of August 13, 2021, there was $2.0 million available for future sale of common stock under the B. Riley Sales Agreement.

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Concentrations

6 Months Ended

Jun. 30, 2021

Concentrations

Concentrations

Note 8. Concentrations

At June 30, 2021 and 2020, the Company had deposits in major financial institutions that exceeded the amount under protection by the Federal Deposit Insurance Corporation (“FDIC”). Currently, the Company is covered up to $250,000 by the FDIC and at times maintains cash balances in excess of the FDIC coverage.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies.

Commitments and Contingencies

Note 9. Commitments and Contingencies

Contractual Obligations

The Company has commitments of approximately $450,000 as of June 30, 2021 for several licensing agreements with consultants and universities. Additionally, the Company has collaboration and license agreements, which upon clinical or commercialization success, may require the payment of milestones of up to $7.9 million and/or royalties up to 6% of net sales of covered products, if and when achieved. However, there can be no assurance that clinical or commercialization success will occur.

The Company currently leases approximately 6,200 square feet of office space at 29 Emmons Drive, Suite B-10 in Princeton, New Jersey pursuant to a lease that expires in October 2022. This office space currently serves as the Company’s corporate headquarters, and both of the Company’s business segments (Specialized BioTherapeutics and Public Health Solutions), operate from this space. The rent for the first 10 months of 2020 was approximately $11,883 per month, or $23.00 per square foot, and then decreased to approximately $11,108 per month, or $21.50 per square foot, starting November 2020, which rate will continue for the remainder of the lease period.

In September 2014, the Company entered into an asset purchase agreement with Hy Biopharma Inc. (“Hy Biopharma”) pursuant to which the Company acquired certain intangible assets, properties and rights of Hy Biopharma related to the development of Hy BioPharma’s synthetic hypericin product. As consideration for the assets acquired, the Company paid $275,000 in cash and issued 184,912 shares of common stock with a fair value based on the Company’s stock price on the date of grant of $3.75 million. These amounts were charged to research and development expense during the third quarter of 2014 as the assets will be used in the Company’s research and development activities and do not have alternative future use pursuant to generally accepted accounting principles in the U.S. In March 2020, the Company issued 1,956,182 shares of common stock to Hy Biopharma as payment for achieving a milestone: the Company determining the Phase 3 clinical trial of HyBryte™ to be successful in the treatment of CTCL. The number of shares of common stock issued to Hy Biopharma was calculated using an effective price of $2.56 per share, based upon a formula set forth in the purchase agreement.

Provided the sole remaining future success-oriented milestone is attained, the Company will be required to make an additional payment of $5.0 million, if and when achieved. Such payment will be payable in restricted securities of the Company provided such number of shares do not exceed 19.9% ownership of the Company’s outstanding stock. As of June 30, 2021, no other milestone or royalty payments have been paid or accrued.

In January 2020, the Company’s Board of Directors authorized the amendment of Dr. Schaber’s employment agreement to increase the number of shares of the Company’s common stock from 5,000 to 500,000 issuable to Dr. Schaber immediately prior to the completion of a transaction, or series or a combination of related transactions, negotiated by its Board of Directors whereby, directly or indirectly, a majority of its capital stock or a majority of its assets are transferred from the Company and/or its stockholders to a third party.

As a result of the above agreements, the Company has the following contractual obligations:

	Research and		Property and
Year	Development		Other Leases		Total
July 1 through December 31, 2021	$	50,000	$	68,786	$	118,786
2022		100,000		111,083		211,083
2023		100,000		—		100,000
2024		100,000		—		100,000
2025		100,000		—		100,000
Total	$	450,000	$	179,869	$	629,869

Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. A liability is only recorded if management determines that it is both probable and reasonably estimable.

COVID-19

Based on the current outbreak of SARS-CoV-2, the pathogen responsible for COVID-19, which has already had an impact on financial markets, there could be additional repercussions to the Company’s operating business, including but not limited to, the sourcing of materials for product candidates, manufacture of supplies for preclinical and/or clinical studies, delays in clinical operations, which may include the availability or the continued availability of patients for trials due to such things as quarantines, conduct of patient monitoring and clinical trial data retrieval at investigational study sites.

The continued global spread of COVID-19 has affected the Company’s operations but did not have a material impact on its business, operating results, financial condition or cash flows as of and for the three and six months ended June 30, 2021. In particular, the third party manufacturers of HyBryte™ have experienced certain delays due to disruptions in their normal human operations, supply chain and other related logistical matters. In part due to these delays, the Company has decided not to pursue a rolling NDA submission for HyBryte™ at this time, in order to provide additional supportive data for inclusion in the NDA filing.

The future impact of the outbreak is highly uncertain and cannot be predicted, and the Company cannot provide any assurance that the outbreak will not have a material adverse impact on the Company’s operations or future results or filings with regulatory health authorities. The extent of the impact to the Company, if any, will depend on future developments, including actions taken to contain the coronavirus.

Emergent BioSolutions Legal Proceedings

In July 2020, the Company filed a demand for arbitration against Emergent BioSolutions, Inc. (“Emergent”) and certain of its subsidiaries with the American Arbitration Association in Mercer County, New Jersey. The Company alleges in the arbitration various breaches of contracts and warranties as well as acts of fraud. Emergent has answered that demand for arbitration denying the allegations and asserting affirmative defenses (see Part II, Item 1 – Legal Proceeding).

The Company is seeking to recover damages in excess of $19 million from Emergent. While the Company intends to vigorously pursue this arbitration, the Company cannot offer any assurances that it will recover any damages from Emergent.

The Company has received invoices from Emergent related to the above matter. No accrual has been made for these invoices as management deems them invalid and not probable of being required to pay them based on the numerous breaches cited in the pending arbitration. These invoices total approximately $331,000.

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Operating Segments

6 Months Ended

Jun. 30, 2021

Operating Segments

Operating Segments

Note 10. Operating Segments

The Company maintains two active operating segments: Specialized BioTherapeutics and Public Health Solutions. Each segment includes an element of overhead costs specifically associated with its operations, with its corporate shared services group responsible for support functions generic to both operating segments.

	Three Months Ended
	June 30,
	2021		2020
Revenues
Public Health Solutions	$	214,824	$	468,009
Specialized BioTherapeutics		—		37,279
Total	$	214,824	$	505,288
Loss from Operations
Public Health Solutions	$	(231,954)	$	(50,737)
Specialized BioTherapeutics		(1,720,566)		(1,808,652)
Corporate		(1,057,125)		(954,483)
Total	$	(3,009,645)	$	(2,813,872)
Amortization and Depreciation Expense
Public Health Solutions	$	311	$	7,318
Specialized BioTherapeutics		1,862		3,167
Corporate		6,667		7,317
Total	$	8,840	$	17,802
Other Income, Net
Specialized BioTherapeutics	$	41,001		35,091
Corporate		206,834		2,018
Total	$	247,835	$	37,109
Share-Based Compensation
Public Health Solutions	$	7,189	$	8,377
Specialized BioTherapeutics		28,731		18,962
Corporate		44,701		53,664
Total	$	80,621	$	81,003

	Six Months Ended
	June 30,
	2021		2020
Revenues
Public Health Solutions	$	362,417	$	1,376,818
Specialized BioTherapeutics		—		53,024
Total	$	362,417	$	1,429,842
Loss from Operations
Public Health Solutions	$	(362,735)	$	(209,239)
Specialized BioTherapeutics		(2,832,974)		(9,166,503)
Corporate		(2,047,543)		(1,911,919)
Total	$	(5,243,252)	$	(11,287,661)
Amortization and Depreciation Expense
Public Health Solutions	$	627	$	14,621
Specialized BioTherapeutics		3,761		6,237
Corporate		13,351		14,590
Total	$	17,739	$	35,448
Other Income/(Loss), Net
Specialized BioTherapeutics	$	125,635	$	68,706
Corporate		(6,671)		23,965
Total	$	118,964	$	92,671
Share-Based Compensation
Public Health Solutions	$	13,484	$	17,842
Specialized BioTherapeutics		58,310		44,251
Corporate		103,632		82,601
Total	$	175,426	$	144,694

	As of		As of
	June 30,		December 31,
	2021		2020
Identifiable Assets
Public Health Solutions	$	123,427	$	176,447
Specialized BioTherapeutics		34,272		147,784
Corporate		29,452,590		19,567,004
Total	$	29,610,289	$	19,891,235

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated as a result of consolidation.

Operating Segments

Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. The Company divides its operations into two operating segments: Specialized BioTherapeutics and Public Health Solutions.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Contracts and Grants Receivable

Contracts and Grants Receivable

Contracts and grants receivable consist of amounts due from various grants from the NIH and contracts from NIAID, an institute of NIH, for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the respective governmental agencies in the month subsequent to period end and collected shortly thereafter. Accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.

Website Development Costs

Website Development Costs

In February 2019, Altamont Pharmaceutical Holdings, LLC, a company which owned 5% or more of the Company’s shares of common stock at the time, signed a service agreement with a third-party vendor to re-develop the Company’s website. Upon completion of the project at the end of June 2019, the Company capitalized the related website development costs of $46,500 in accordance with FASB Codification ASC 350-50 “Accounting for Web Site Development Costs.” During the quarter ended September 30, 2019, the Company began amortizing the website development costs on a straight-line basis over three years, the estimated useful life of the website. The Company will also review its capitalized website development costs periodically for impairment. Website amortization expense for the three months ended June 30, 2021 and 2020 was $3,875 and $3,875, respectively, and accumulated amortization was $31,000 and $15,502, respectively, as of June 30, 2021 and 2020. Website amortization expense for the six months ended June 30, 2021 and 2020 was $7,750 and $7,752, respectively.  Website development costs are included in other assets in the accompanying consolidated balance sheets.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Office furniture and equipment, website development costs and intangible assets with finite lives are evaluated and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and the carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.

The Company did not record any impairment of long-lived assets for the three or six months ended June 30, 2021 or 2020.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on June 30, 2021. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

● Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

● Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

● Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, contracts and grants receivable, research and development incentives receivable, accounts payable, accrued expenses, and accrued compensation approximate their fair value based on the short-term nature of these instruments.

The carrying amounts reported in the consolidated balance sheets for convertible debt and the loan under the Paycheck Protection Program approximate their fair value based on their maturity dates.

Revenue Recognition

Revenue Recognition

The Company’s revenues are primarily generated from government contracts and grants. The revenue from government contracts and grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the contracts and grants, plus a facilities and administrative rate that provides funding for overhead expenses and management fees. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs reimbursable internal expenses that are related to the government contracts and grants.

Research and Development Costs

Research and Development Costs

Research and development costs are charged to expense when incurred in accordance with FASB ASC 730, Research and Development. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries, share-based compensation, employee benefits, equipment depreciation and allocation of various corporate costs.

Share-Based Compensation

Share-Based Compensation

Stock options are issued with an exercise price equal to the market price on the date of grant. Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees generally vest 25% on the grant date, then 25% each subsequent year for a period of three years. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position, the options will expire within three months, unless otherwise extended by the Board.

From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for services performed under the Company’s 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of stock options, restricted stock, deferred stock and unrestricted stock to the Company’s employees and non-employees (including consultants). The shares issued under the 2015 Plan are registered on Form S-8 (SEC File No. 333-208515). However, as shares of common stock are not covered by a reoffer prospectus, the certificates reflecting such shares reflect a Securities Act of 1933, as amended restrictive legend. Stock compensation expense for equity-classified awards to nonemployees is measured on the date of grant and is recognized when the services are performed.

The fair value of options issued during the six months ended June 30, 2021 and 2020 was estimated using the Black-Scholes option-pricing model and the following assumptions:

● a dividend yield of 0%;

● an expected life of 4 years;

● volatility of 87% for 2021 and 77% - 79% for 2020; and

● risk free interest rates of 0.27% - 0.60% for 2021 and 1.38% - 1.66% for 2020.

The fair value of each option grant made during the six months ended June 30, 2021 and 2020 was estimated on the date of each grant using the Black-Scholes option pricing model and recognized as share-based compensation expense ratably over the option vesting periods, which approximates the service period.

Foreign Currency Transactions and Translation

Foreign Currency Transactions and Translation

In 2018, the Company changed the status of a wholly owned subsidiary in the United Kingdom (“UK”) from inactive to active and incurred expenditures in multiple currencies including the U.S. dollar, the British Pound and the Euro to fund its clinical trial operations in the UK and select countries in Europe. In accordance with FASB ASC 830 Foreign Currency Matters, the UK subsidiary expresses its U.S. dollar and Euro denominated transactions in its functional currency, the British Pound, with related transaction gains or losses included in net income. On a quarterly basis, the financial statements of the UK subsidiary are translated into U.S. dollars and consolidated into the Company’s financials, with related translation adjustments reported as a cumulative translation adjustment (“CTA”), which is a component of accumulated other comprehensive loss. During the three months ended June 30, 2021 and 2020, the Company recognized a foreign currency transaction gain of $17,330 and a foreign currency transaction loss of $3,583, respectively, in the accompanying consolidated statements of operations.  During the six months ended June 30, 2021 and 2020, the Company recognized a foreign currency transaction gain of $44,583 and a foreign currency transaction loss of $26,818, respectively, in the accompanying consolidated statements of operations.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence is considered, including the Company’s current and past performance, the market environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognized an income tax benefit of $864,742 and $836,893 from the sale of New Jersey NOL carryforwards during the six months ended June 30, 2021 and 2020, respectively. The Company recognized accrued interest and penalties associated with uncertain tax positions, if any as part of the income tax provision. There were no tax related interest and penalties recorded for the six months ended June 30, 2021 or 2020. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax positions at June 30, 2021 or December 31, 2020.

Research and Development Incentive Income and Receivable

Research and Development Incentive Income and Receivable

The Company recognizes other income from UK research and development incentives when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. The small or medium sized enterprise (“SME”) research and development tax relief program supports companies that seek to research and develop an advance in their field and is governed through legislative law by HM Revenue & Customs as long as specific eligibility criteria are met.

Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the SME research and development tax relief program described above. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. As a result, amounts realized under the SME research and development tax relief program are recorded as a component of other income.

The following table shows the change in the UK research and development incentives receivable from December 31, 2020 to June 30, 2021:

	Current		Long-Term		Total
Balance at December 31, 2020	$	361,096	$	73,142	$	434,238
UK research and development incentives, transfer		73,142		(73,142)		—
UK research and development incentives		—		29,159		29,159
Additional 2019 incentive earned		51,893		—		51,893
UK research and development incentives cash receipt		(383,933)		—		(383,933)
Foreign currency translation		4,400		(634)		3,766
Balance at June 30, 2021	$	106,598	$	28,525	$	135,123

Loss Per Share

Loss Per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing loss applicable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the entity. Since there is a significant number of options and warrants outstanding, fluctuations in the actual market price can have a variety of results for each period presented.

The following table summarizes potentially dilutive adjustments to the number of common shares which were excluded from the diluted calculation because their effect would be anti-dilutive due to the losses in each period:

	As of June 30,
	2021	2020
Common stock purchase warrants	5,731,464	5,886,817
Stock options	1,939,386	1,499,580
Total	7,670,850	7,386,397

The weighted average exercise price of the Company’s warrants and stock options outstanding at June 30, 2021 were $2.96 and $2.75 per share, respectively, and at June 30, 2020 were $2.92 and $3.20 per share, respectively.

Use of Estimates and Assumptions

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions such as the fair value of warrants and stock options and to accrue for clinical trials in process that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and presentation.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2021

Summary of Significant Accounting Policies

Schedule of united kingdom research and development incentives receivable

	Current		Long-Term		Total
Balance at December 31, 2020	$	361,096	$	73,142	$	434,238
UK research and development incentives, transfer		73,142		(73,142)		—
UK research and development incentives		—		29,159		29,159
Additional 2019 incentive earned		51,893		—		51,893
UK research and development incentives cash receipt		(383,933)		—		(383,933)
Foreign currency translation		4,400		(634)		3,766
Balance at June 30, 2021	$	106,598	$	28,525	$	135,123

Schedule of potentially dilutive adjustments to the weighted average number of common shares excluded from the calculation

	As of June 30,
	2021	2020
Common stock purchase warrants	5,731,464	5,886,817
Stock options	1,939,386	1,499,580
Total	7,670,850	7,386,397

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Leases (Tables)

6 Months Ended

Jun. 30, 2021

Leases

Reconcilation of lease cash flows to the right-of-use lease assets and liablities recognized in the financial statements.

	Operating		Financing
	Lease		Lease
Right-of-use lease asset:
Right-of-use lease asset, January 1,2021	$	222,445	$	5,582
Reduction/amortization		(56,698)		(3,721)
Right of use lease asset, June 30, 2021	$	165,747	$	1,861
Lease liability:
Lease liability, January 1, 2021	$	222,441	$	6,149
Repayments		(56,698)		(4,048)
Lease liability, June 30, 2021	$	165,743	$	2,101
Lease expense for the six months ended June 30, 2021:
Lease expense	$	66,650	$	—
Amortization expense		—		3,721
Interest expense		—		224
Total	$	66,650	$	3,945
Contractual cash payments for the remaining lease term as of June 30, 2021:
2021	$	66,650	$	2,136
2022		111,083		—
Total	$	177,733	$	2,136
Remaining lease term (months) as of June 30, 2021		16		3

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2021

Accrued Expenses

Schedule of accrued expenses

	June 30,		December 31,
	2021		2020
Clinical trial expenses	$	2,442,105	$	2,510,111
Other		19,525		128,197
Total	$	2,461,630	$	2,638,308

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Debt (Tables)

6 Months Ended

Jun. 30, 2021

Debt

Schedule of principle and interest payments due

Year	Principal		Interest		Total
July 2021 to December 2021	$	—	$	452,186	$	452,186
2022		—		897,000		897,000
2023		4,000,000		769,138		4,769,138
2024		4,000,000		430,338		4,430,338
2025		2,000,000		110,566		2,110,566
Total	$	10,000,000	$	2,659,228	$	12,659,228

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies.

Schedule of contractual obligation

	Research and		Property and
Year	Development		Other Leases		Total
July 1 through December 31, 2021	$	50,000	$	68,786	$	118,786
2022		100,000		111,083		211,083
2023		100,000		—		100,000
2024		100,000		—		100,000
2025		100,000		—		100,000
Total	$	450,000	$	179,869	$	629,869

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Operating Segments (Tables)

6 Months Ended

Jun. 30, 2021

Operating Segments

Schedule of operating segments

	Three Months Ended
	June 30,
	2021		2020
Revenues
Public Health Solutions	$	214,824	$	468,009
Specialized BioTherapeutics		—		37,279
Total	$	214,824	$	505,288
Loss from Operations
Public Health Solutions	$	(231,954)	$	(50,737)
Specialized BioTherapeutics		(1,720,566)		(1,808,652)
Corporate		(1,057,125)		(954,483)
Total	$	(3,009,645)	$	(2,813,872)
Amortization and Depreciation Expense
Public Health Solutions	$	311	$	7,318
Specialized BioTherapeutics		1,862		3,167
Corporate		6,667		7,317
Total	$	8,840	$	17,802
Other Income, Net
Specialized BioTherapeutics	$	41,001		35,091
Corporate		206,834		2,018
Total	$	247,835	$	37,109
Share-Based Compensation
Public Health Solutions	$	7,189	$	8,377
Specialized BioTherapeutics		28,731		18,962
Corporate		44,701		53,664
Total	$	80,621	$	81,003

	Six Months Ended
	June 30,
	2021		2020
Revenues
Public Health Solutions	$	362,417	$	1,376,818
Specialized BioTherapeutics		—		53,024
Total	$	362,417	$	1,429,842
Loss from Operations
Public Health Solutions	$	(362,735)	$	(209,239)
Specialized BioTherapeutics		(2,832,974)		(9,166,503)
Corporate		(2,047,543)		(1,911,919)
Total	$	(5,243,252)	$	(11,287,661)
Amortization and Depreciation Expense
Public Health Solutions	$	627	$	14,621
Specialized BioTherapeutics		3,761		6,237
Corporate		13,351		14,590
Total	$	17,739	$	35,448
Other Income/(Loss), Net
Specialized BioTherapeutics	$	125,635	$	68,706
Corporate		(6,671)		23,965
Total	$	118,964	$	92,671
Share-Based Compensation
Public Health Solutions	$	13,484	$	17,842
Specialized BioTherapeutics		58,310		44,251
Corporate		103,632		82,601
Total	$	175,426	$	144,694

	As of		As of
	June 30,		December 31,
	2021		2020
Identifiable Assets
Public Health Solutions	$	123,427	$	176,447
Specialized BioTherapeutics		34,272		147,784
Corporate		29,452,590		19,567,004
Total	$	29,610,289	$	19,891,235

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Nature of Business (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) segment	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Aug. 13, 2021 USD ($)	Dec. 31, 2019 USD ($)
Nature of business:
Operating segments | segment			2
Accumulated deficit	$ (197,473,680)		$ (197,473,680)		$ (193,214,134)
Net loss	(1,897,068)	$ (2,776,763)	(4,259,546)	$ (10,358,097)
Net cash used in operating activities			(5,644,147)	(4,338,530)
Cash and cash equivalents	28,979,969	$ 11,168,305	28,979,969	$ 11,168,305	18,676,663		$ 5,420,708
Cash and cash equivalents, period increase (decrease)			10,303,306
Period increase (decrease) as a percent			55
Working capital	25,228,135		$ 25,228,135		13,386,485
Working capital increase, decrease					11,841,650
Working capital increase (decrease) as a percent			88.00%
Grants Receivable, Current	117,680		$ 117,680		203,774
Debt instrument, face amount	10,000,000.0		$ 10,000,000.0		$ 20,000,000.0
FBR Sales Agreement
Nature of business:
Borrowing capacity						$ 2,000,000.0
Late withdrawal loan
Nature of business:
Maximum borrowing capacity						5,000,000
Line of credit
Nature of business:
Debt instrument, face amount						5,000,000
Loan and security agreement
Nature of business:
Debt instrument, face amount						$ 10,000,000.0
CiVax
Nature of business:
Term (in years)			two years
NIH
Nature of business:
Grants Receivable, Current	$ 1,800,000		$ 1,800,000
Collaborative arrangment, transaction with party | CiVax
Nature of business:
Revenue from collaborative arrangement			1,500,000
Collaborative arrangment, transaction with party | NIAID | Government contract
Nature of business:
Revenue from collaborative arrangement			$ 700,000
Term (in years)			five years
Collaborative arrangment, transaction with party | DTRA | Government contract
Nature of business:
Revenue from collaborative arrangement			$ 600,000
Term (in years)			three years

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Summary of Significant Accounting Policies (Details)	3 Months Ended					6 Months Ended
	Jun. 30, 2021 USD ($) $ / shares	Mar. 31, 2021 USD ($)	Jun. 30, 2020 USD ($) $ / shares	Mar. 31, 2020	Jun. 30, 2019 USD ($)	Jun. 30, 2021 USD ($) segment $ / shares	Jun. 30, 2020 USD ($) $ / shares	Feb. 28, 2019
Accounting policies:
Operating segments | segment						2
Website development cost					$ 46,500
Amortization and depreciation	$ 8,840		$ 17,802			$ 17,739	$ 35,448
Intangible, amortization expense		$ 3,875	3,875
Intangible, accumulated amortization		$ 31,000	15,502				15,502
Impairment of long-lived assets	0		0			$ 0	$ 0
Requisite period (in years)						three
Expiration period						P10Y
Option vesting rights						25%
Dividend yield						0.00%	0.00%
Expected life						4 years	4 years
Volatility rate						87.00%
Volatility rate minimum							77.00%
Volatility rate maximum							79.00%
Risk free interest rate, minimum				1.38%		0.27%
Risk free interest rate, maximum				1.66%		0.60%
Foreign currency transaction gain (loss)	17,330		$ (3,583)			$ 44,583	$ 26,818
Income tax benefit	(864,742)					(864,742)	$ (836,893)
Interest and penalties	$ 0					$ 0
Weighted average exercise price, outstanding warrants | $ / shares	$ 2.96		$ 2.92			$ 2.96	$ 2.92
Weighted average exercise price | $ / shares	$ 2.75		$ 3.20			$ 2.75	$ 3.20
Termination benefits
Accounting policies:
Expiration period						three
Altamont Pharmaceutical Holdings, LLC
Accounting policies:
Noncontrolling interest, ownership (as a percent)								5.00%
Directors, upon re-election
Accounting policies:
Requisite period (in years)						one
Media Content
Accounting policies:
Intangible, amortization expense						$ 7,750	$ 7,752

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Summary of Significant Accounting Policies - UK (Details)	6 Months Ended
	Jun. 30, 2021 USD ($)
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Balance, bgn	$ 434,238
UK research and development incentives, Q1 2021	29,159
Additional 2019 incentive earned	51,893
UK research and development incentives cash receipt	(383,933)
Foreign currency translation	3,766
Balance, end	135,123
Current
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Balance, bgn	361,096
UK research and development incentives, transfer	73,142
Additional 2019 incentive earned	51,893
UK research and development incentives cash receipt	(383,933)
Foreign currency translation	4,400
Balance, end	106,598
Long-term
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Balance, bgn	73,142
UK research and development incentives, transfer	(73,142)
UK research and development incentives, Q1 2021	29,159
Foreign currency translation	(634)
Balance, end	$ 28,525

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Summary of Significant Accounting Policies - Loss per share (Details) - shares	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded	7,670,850	7,386,397
Common stock purchase warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded	5,731,464	5,886,817
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded	1,939,386	1,499,580

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Leases (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Leases
Right-of-use asset, operating lease	$ 165,747	$ 222,445
Right of use asset, finance lease	1,861	5,582
Lease liability, operating lease	165,743	222,441
Lease liability, finance lease	$ 2,101	$ 6,149

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Leases - Reconcilation (Details)	6 Months Ended
	Jun. 30, 2021 USD ($)
Leases
Right of use asset, bgn	$ 222,445
Reduction/amortization	(56,698)
Right of use asset, end	165,747
Lease liability - Operating, bgn	222,441
Repayments	(56,698)
Lease liability - Operating, end	165,743
Lease liability - Financing, bgn	6,149
Repayments	(4,048)
Lease liability - Financing, end	2,101
Right-of-use lease assset, finance
Right of use asset, bgn	5,582
Right of use asset, end	1,861
Lease expense
Lease expense, operating	66,650
Amortization expense, financing lease	3,721
Interest expense, finance lease	224
Contractual cash payments, operating lease
Year one	66,650
Year two	111,083
Operating lease, total payments due	177,733
2021	2,136
Finance lease, total payments due	$ 2,136
Remaining term of contract, operating	16 months
Remaining term of contract, finance	3 months

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Accrued Expenses (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Accrued Expenses
Clinical trail expenses	$ 2,442,105	$ 2,510,111
Other	19,525	128,197
Accrued expenses	$ 2,461,630	$ 2,638,308

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Debt (Details) - USD ($)	1 Months Ended	3 Months Ended	6 Months Ended
	Dec. 31, 2020	Jun. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Apr. 30, 2020
Debt instruments
Debt instrument, face amount	$ 20,000,000.0	$ 10,000,000.0	$ 10,000,000.0
Tranches	three
Convertible debt	$ 9,859,739	9,835,213	9,835,213
Effective interest rate	8.47%
Interest rate on not borrowed but available	1.00%
Interest expense		223,636	444,814
Deferred issuance costs		164,787	164,787
Debt amortization		$ 10,831	$ 20,986
Conversion price (in Dollars per share)				$ 4.10
First Tranche
Debt instruments
Convertible note	$ 10,000,000.0
Second Tranche
Debt instruments
Convertible note	5,000,000.0
Third Tranche
Debt instruments
Convertible note	5,000,000.0
CARES Act Loan - COVID
Debt instruments
Loan amount					$ 417,830
Bears interest rate				0.98%
Convertible Debt
Debt instruments
Debt instrument, face amount	$ 20,000,000.0

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Debt- Payments due (Details)	Jun. 30, 2021 USD ($)
Convertible Debt (Details) - Schedule of principle and interest payments due [Line Items]
April 2021 to December 2021	$ 452,186
2022	897,000
2023	4,769,138
2024	4,430,338
2025	2,110,566
Total	12,659,228
Principal [Member]
Convertible Debt (Details) - Schedule of principle and interest payments due [Line Items]
April 2021 to December 2021
2022
2023	4,000,000
2024	4,000,000
2025	2,000,000
Total	10,000,000
Interest [Member]
Convertible Debt (Details) - Schedule of principle and interest payments due [Line Items]
April 2021 to December 2021	452,186
2022	897,000
2023	769,138
2024	430,338
2025	110,566
Total	$ 2,659,228

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Income Taxes (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020
Income Taxes
NOL for Federal tax		$ 114,000,000
NOL for State tax		20,000,000
NOL for Foreign tax		$ 1,200,000
Net operating loss carry forwards, limitations on use, description	$8.2
NOL carryforwards	$ 864,742		$ 836,893

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Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021	Aug. 17, 2021	Jun. 30, 2021	Dec. 31, 2020
Shareholders' Equity (Details) [Line Items]
Preferred stock, shares authorized	350,000		350,000	350,000
Weighted average price per share (in Dollars per share)	$ 1.75
Subsequent Event [Member]
Shareholders' Equity (Details) [Line Items]
Common stock available for sale (in Dollars)		$ 2.0
FBR Capital Markets & Co. [Member]
Shareholders' Equity (Details) [Line Items]
Shares issues (in shares)	9,435,091
Common Stock
Shareholders' Equity (Details) [Line Items]
Warrants issued to purchase shares	13
Common Stock | Maximum [Member]
Shareholders' Equity (Details) [Line Items]
Warrants exercise price (in Dollars per share)	$ 3.95

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Concentrations (Details) - USD ($) $ in Millions	Mar. 31, 2021	Mar. 31, 2020
Concentrations
Deposits	$ 250,000	$ 250,000

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Commitments and Contingencies (Details)	1 Months Ended		3 Months Ended
	Jan. 31, 2020 USD ($)	Sep. 30, 2014 USD ($) shares	Mar. 31, 2021 USD ($) m² $ / shares	Mar. 31, 2020 shares
Commitments and Contingencies (Details) [Line Items]
Commitments related to agreements			$ 450,000
Maximum payment for commitment milestones			$ 7,900,000
Percentage for royalties			6.00%
Office space (in Square Meters) | m²			6,200
Cash paid to acquire Hy Biopharma intangible asset		$ 275,000
Issuance of shares for assets (in shares) | shares		184,912
Fair value of shares issued in connection with Hy BioPharma asset purchase		$ 3.75
Shares exercisable (in shares) | shares				1,956,182
Effective price per share (in Dollars per share) | $ / shares			$ 2.56
Additional Payments			$ 5,000,000.0
Ownership of company outstanding			19.90%
Minimum [Member]
Commitments and Contingencies (Details) [Line Items]
Authorized shares to be issued	$ 5,000
Maximum [Member]
Commitments and Contingencies (Details) [Line Items]
Authorized shares to be issued	$ 500,000

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Commitments and Contingencies - Obligations (Details)	Mar. 31, 2021 USD ($)
Commitments and Contingencies (Details) - Schedule of contractual obligation [Line Items]
2022	$ 211,083
2023	100,000
2024	100,000
2025	100,000
Total	629,869
Licensing Fee [Member]
Commitments and Contingencies (Details) - Schedule of contractual obligation [Line Items]
2022	100,000
2023	100,000
2024	100,000
2025	100,000
Total	450,000
Property and Other Leases [Member]
Commitments and Contingencies (Details) - Schedule of contractual obligation [Line Items]
2022	111,083
2023
2024
2025
Total	$ 179,869

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Operating Segments (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Segment reporting
Revenues	$ 214,824	$ 505,288	$ 362,417	$ 1,429,842
Loss from operations	(3,009,645)	(2,813,872)	(5,243,252)	(11,287,661)
Amortization and depreciation	8,840	17,802	17,739	35,448
Other income, net	247,835	37,109	118,964	92,671
Share-based compensation	80,621	81,003	175,426	144,694
Identifiable Assets	29,610,289		29,610,289		$ 19,891,235
Public Health Solutions
Segment reporting
Revenues	214,824	468,009	362,417	1,376,818
Loss from operations	(231,954)	(50,737)	(362,735)	(209,239)
Amortization and depreciation	311	7,318	627	14,621
Share-based compensation	7,189	8,377	13,484	17,842
Identifiable Assets	123,427		123,427		176,447
Specialized BioTherapeutics
Segment reporting
Revenues		37,279		53,024
Loss from operations	(1,720,566)	(1,808,652)	(2,832,974)	(9,166,503)
Amortization and depreciation	1,862	3,167	3,761	6,237
Other income, net	41,001	35,091	125,635	68,706
Share-based compensation	28,731	18,962	58,310	44,251
Identifiable Assets	34,272		34,272		147,784
Corporate
Segment reporting
Loss from operations	(1,057,125)	(954,483)	(2,047,543)	(1,911,919)
Amortization and depreciation	6,667	7,317	13,351	14,590
Other income, net	206,834	2,018	(6,671)	23,965
Share-based compensation	44,701	$ 53,664	103,632	$ 82,601
Identifiable Assets	$ 29,452,590		$ 29,452,590		$ 19,567,004